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Internal Control Weaknesses And Information Uncertainty
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Book Synopsis Internal Control Weaknesses and Information Uncertainty by : Messod D. Beneish
Download or read book Internal Control Weaknesses and Information Uncertainty written by Messod D. Beneish and published by . This book was released on 2014 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze a sample of 330 firms making unaudited disclosures required by Section 302 and 383 firms making audited disclosures required by Section 404 of the Sarbanes-Oxley Act. We find that Section 302 disclosures are associated with negative announcement abnormal returns of -1.8 percent, and that firms experience an abnormal increase in equity cost of capital of 68 basis points. We conclude that Section 302 disclosures are informative and point to lower credibility of disclosing firms' financial reporting. In contrast, we find that Section 404 disclosures have no noticeable impact on stock prices or firms' cost of capital. Further, we find that auditor quality attenuates the negative response to Section 302 disclosures and that accelerated filers - larger firms required to file under Section 404 - have significantly less negative returns (-1.10 percent) than non-accelerated filers (-4.22 percent). The findings have implications for the debate about whether to implement a scaled securities regulation system for smaller public companies: material weakness disclosures are more informative for smaller firms that likely have higher pre-disclosure information uncertainty.
Download or read book Internal Control written by Olof Arwinge and published by Springer Science & Business Media. This book was released on 2012-11-07 with total page 205 pages. Available in PDF, EPUB and Kindle. Book excerpt: The concept of internal control has developed along with audit practice. As demands have been made for greater accountability in corporate governance, the significance of internal control systems in companies has increased. Traditionally internal control has had a fairly direct relationship to financial reporting quality but wider approaches to internal control have expanded those boundaries much further. Stakeholders are increasingly concerned with the effectiveness of internal controls, and disclosure requirements are making firms to go public with regard to their internal control systems. From a design perspective, current research suggests that internal control designs are contingent upon variables such as company strategies, risk appetite, regulatory characteristics, and organizational size. Also there is much to learn about internal control quality, and the way internal control quality is associated with overall corporate governance quality. This book fills that gap.
Book Synopsis Continuing and Widespread Weaknesses in Internal Controls Result in Losses Through Fraud, Waste, and Abuse by : United States. General Accounting Office
Download or read book Continuing and Widespread Weaknesses in Internal Controls Result in Losses Through Fraud, Waste, and Abuse written by United States. General Accounting Office and published by . This book was released on 1980 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis National Culture and Internal Control Material Weaknesses Around the World by : Kiridaran (Giri) Kanagaretnam
Download or read book National Culture and Internal Control Material Weaknesses Around the World written by Kiridaran (Giri) Kanagaretnam and published by . This book was released on 2017 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: The scandals surrounding questionable accounting practices and corporate wrongdoing during 2000-2008 have often been attributed to the lack of effective internal controls. We examine the relations between national culture and the incidence and the number of reported internal control material weaknesses (ICMW). We focus on three dimensions of national culture, individualism, uncertainty avoidance, and power distance (as identified by Hofstede (2001)), which we hypothesize are related to ICMW. Consistent with our hypotheses, cross-country analysis indicates that individualism and power distance are positively related, and uncertainty avoidance is negatively related, to the existence of ICMW. We also find a significant positive relation between individualism and the number of ICMW. These results are robust to variety of sensitivity tests. Additionally, we document that all three dimensions of national culture influence the propensity to remediate previously identified ICMW.
Author :United States General Accounting of Gao Publisher :Independently Published ISBN 13 :9781090853172 Total Pages :32 pages Book Rating :4.8/5 (531 download)
Book Synopsis Internal Control Weaknesses at the U.S. Customs Service by : United States General Accounting of Gao
Download or read book Internal Control Weaknesses at the U.S. Customs Service written by United States General Accounting of Gao and published by Independently Published. This book was released on 2019-03-21 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Internal Control Weaknesses at the U.S. Customs Service
Book Synopsis IT Internal Control Weaknesses and Firm Performance by : Dale Stoel
Download or read book IT Internal Control Weaknesses and Firm Performance written by Dale Stoel and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The information systems literature and the public press have called for organizations to more closely scrutinize their information technology (IT) controls; however, little more than anecdotal evidence exists on the business value of IT internal control investments, beyond regulatory compliance. Drawing on the strategy and accounting literature, we (a) advance a strategic necessity perspective to the question of IT internal controls value; and (b) use the unique setting provided by the enactment of the Sarbanes-Oxley Act of 2002 (SOX) to investigates the relationship between IT internal control weaknesses (ICW) and both accounting earnings (a contemporaneous measure of firm performance) and market value (a forward looking, risk-adjusted measure of firm performance). Using a data set that provides audited annual assessments of the effectiveness of both IT and non-IT internal controls for a cross-section of companies as mandated by SOX, we find that firms that report an IT ICW have lower accounting earnings compared to firms with strong IT internal controls. We also find that IT ICW moderates the association between accounting earnings and market valuation, with firms reporting weak IT internal controls having a lower earnings response coefficient. These results are sustained even after controlling for non-IT ICW and firm-specific factors that are known determinants of ICW. The results are also robust to econometric corrections for potential simultaneity and self-selection bias using Heckman's two-stage procedure. Overall, our results provide empirical evidence which suggests that IT internal controls are a strategic necessity and that information systems risk is priced by the capital markets.
Book Synopsis Internal Control Weaknesses at Gsa by : United States Accounting Office (GAO)
Download or read book Internal Control Weaknesses at Gsa written by United States Accounting Office (GAO) and published by Createspace Independent Publishing Platform. This book was released on 2018-05-22 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Internal Control Weaknesses at GSA
Book Synopsis Internal Control Weakness and the Asymmetrical Behavior of Selling, General, and Administrative Costs by : Jeong-Bon Kim
Download or read book Internal Control Weakness and the Asymmetrical Behavior of Selling, General, and Administrative Costs written by Jeong-Bon Kim and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Firms with internal control weakness (ICW) problems are less likely to provide managers with timely and precise information required for adjusting internal resources. The real options theory implies that managers in ICW firms, faced with information uncertainty, are more likely to postpone downward adjustments of slack resources by exercising an option to wait for more information about future business prospects. Based upon this theory, we hypothesize and find that selling, general, and administrative (SG&A) costs are stickier for ICW firms than for non-ICW firms. We also find that the effect of ICW on SG&A cost stickiness is primarily attributable to internal information control problems and becomes weakened significantly after firms remediate previously reported ICW. This impact of ICW on SG&A cost stickiness is robust to controlling for the possible influence of omitted variables, accounting for potential endogeneity in the presence of ICW, and using a firm-specific measure of cost stickiness. Our results are consistent with the prediction of the real options theory in that poor information quality associated with ICW incents managers to postpone downward adjustments of SG&A resources until the information uncertainty is resolved.
Book Synopsis How to Comply with Sarbanes-Oxley Section 404 by : Michael J. Ramos
Download or read book How to Comply with Sarbanes-Oxley Section 404 written by Michael J. Ramos and published by Wiley. This book was released on 2004-03-12 with total page 304 pages. Available in PDF, EPUB and Kindle. Book excerpt: Designed specifically for Sarbanes-Oxley Section 404 compliance, How to Comply with Sarbanes-Oxley Section 404 features: A step-by-step approach to engagement performance Original material from a leading expert in auditing and accounting Practice aids, including forms, checklists, illustrations, diagrams, and tables In-depth explanations to help professionals understand how best to approach the internal control engagement Examples and action plans providing blueprints for implementing requirements of the Act Order your copy today!
Book Synopsis Audits of Internal Control for Public Companies Special Supplement for Use with Principles of Auditing and Other Assurance Services by : Ray Whittington
Download or read book Audits of Internal Control for Public Companies Special Supplement for Use with Principles of Auditing and Other Assurance Services written by Ray Whittington and published by . This book was released on 2004 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Market Reactions to the Disclosure of Internal Control Weaknesses and to the Characteristics of Those Weaknesses Under Section 302 of the Sarbanes Oxley Act of 2002 by : Jacqueline S. Hammersley
Download or read book Market Reactions to the Disclosure of Internal Control Weaknesses and to the Characteristics of Those Weaknesses Under Section 302 of the Sarbanes Oxley Act of 2002 written by Jacqueline S. Hammersley and published by . This book was released on 2007 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: Under Section 302 of the Sarbanes Oxley Act, officers must evaluate the effectiveness of internal controls quarterly. We examine the stock price reaction to management's disclosure of internal control weaknesses and to their characteristics, controlling for other material announcements are made during the event window. We find evidence suggesting that some characteristics of the internal control weaknesses - their severity, management's conclusion regarding the effectiveness of the controls, their auditability, and how vague the disclosures are - are informative. In subsequent analyses, we find that the relation between returns and auditability holds for significant deficiencies and control deficiencies as well as for material weaknesses. However, the relation between returns and how vague the disclosure is is driven by the observations with material weaknesses. This suggests that the information content of internal control weakness disclosures depends on the severity of the internal control weakness.
Book Synopsis The Impact of Internal Control Reports on Information Precision by : Tzu-Ching Weng
Download or read book The Impact of Internal Control Reports on Information Precision written by Tzu-Ching Weng and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores directly the effect of internal control weakness (hereafter ICW) and their remediation on information precision for firms who filed Section 404 reports with the SEC. Our proxies for information precision are drawn from Barron et al. (1998). First, we find that the presence of ICW is associated with lower precision of public and private information, which in turn increases overall information uncertainty. Second, we find that the adverse effect of ICW on public information precision is stronger for firms with firm-level ICW than for those with account-specific ICW. However, we find no such relation for private information precision. Third, we find that the precision of both private and public information are higher for firms remedying previous weakness relative to firms who do not remedy their weakness. Finally, we find that firms with different internal control opinions in successive years exhibit changes in precision of public and private information consistent with the changes in internal control quality. Our results are robust after controlling for self-selection bias.
Book Synopsis Internal Control Weaknesses and Financial Reporting Fraud by : Dain C. Donelson
Download or read book Internal Control Weaknesses and Financial Reporting Fraud written by Dain C. Donelson and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether and how weak internal controls increase the risk of financial reporting fraud by top managers. There is a longstanding debate on whether control strength significantly affects fraud risk, yet little evidence on this issue. Further, there is no evidence on the mechanism linking control strength to fraud risk. We find a strong association between material weaknesses and future fraud revelation. We theorize this link could be attributable to weak controls a) giving managers greater opportunity to commit fraud or b) signaling a management characteristic that does not emphasize reporting quality and integrity. We find support for the opportunity explanation, but not through specific accounts linked to control weaknesses. Instead, consistent with the PCAOB's assertion, weaknesses in entity-wide controls, not process-level controls, are associated with a higher risk of reporting fraud.
Book Synopsis Accounting Information Systems and Internal Control by : E. H. J. Vaassen
Download or read book Accounting Information Systems and Internal Control written by E. H. J. Vaassen and published by Wiley. This book was released on 2009-12-21 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Accounting Information Systems and Internal Control provides comprehensive approaches to the design and evaluation of internal control systems. In doing so, it covers both the traditional process approach that focuses on individual organizational processes, and a contemporary typology approach that focuses on different types of organizations as unique combinations of organizational processes. In both approaches and throughout the text, IT is considered an integral part and enabler of internal control. The second edition of Accounting Information Systems and Internal Control: Places internal control in the context of other related disciplines. Discusses contemporary developments in the field of internal control. Explores the relationship between internal control and management control as means to achieve organizational control. Examines the dynamics of internal control and IT. Provides tools and techniques for documenting and evaluating internal control systems. Discusses the process approach to designing and evaluating internal control systems. Introduces the contemporary typology approach to designing and evaluating internal control systems, focusing on internal controls that are applicable in various types of organization, including trade, production, service (including knowledge intensive firms and telecoms), financial industry and governmental organizations. Illustrates practical internal control issues using articles from several major international newspapers such as the Financial Times, the Guardian, The New York Times and the Washington Post. Accounting Information Systems and Internal Control has been written for students in Accounting Information Systems and Internal Control courses at advanced undergraduate, graduate and postgraduate levels. A website accompanies the book and provides case studies, PowerPoint slides, an instructor’s manual together with questions and answers: www.wileyeurope.com/college/vaassen
Book Synopsis The Impact of Sarbanes-Oxley on Internal Control Remediation by : Kam C. Chan
Download or read book The Impact of Sarbanes-Oxley on Internal Control Remediation written by Kam C. Chan and published by . This book was released on 2019 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study uses logistic regression analysis to examine the determinants of internal control weakness remediation on a sample of firms that reported internal control weaknesses at the end of fiscal year 2004, and then reported the presence or absence of internal control weaknesses at the end of fiscal year 2005. Our sample included 243 firms. Of these, 174 firms reported internal control weaknesses in the 2004 filing with the SEC, but had successfully remediated them one year later. The remaining 69 firms reported internal control weaknesses in 2004 and again in 2005. We found that resources available to the firms (e.g., return on assets, size) was positively associated with remediation. Use of a Big 4 auditor, having more audit committee meetings, having more business segments, having less time to remediate between the 2004 financial statement filings and the end of the 2005 fiscal year (i.e., filing lag) were negatively associated with successful remediation. Also negatively associated with remediation were the number and type (general control weakness versus specific account weakness) of internal control weaknesses the firms had.
Book Synopsis Internal Control Weaknesses at Department of Energy Research Laboratories by : United States Accounting Office (GAO)
Download or read book Internal Control Weaknesses at Department of Energy Research Laboratories written by United States Accounting Office (GAO) and published by Createspace Independent Publishing Platform. This book was released on 2018-05-19 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Internal Control Weaknesses at Department of Energy Research Laboratories
Book Synopsis Economic Determinants and Consequences of Voluntary Disclosure of Internal Control Effectiveness by : Chong-ŭn Yi
Download or read book Economic Determinants and Consequences of Voluntary Disclosure of Internal Control Effectiveness written by Chong-ŭn Yi and published by . This book was released on 2008 with total page 146 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation investigates the economic determinants of firms' decisions to voluntarily disclose internal control weaknesses, and the economic consequences of such disclosures, in the context of companies' initial public offerings (IPOs) of equity securities. I find that IPO firms with greater potential litigation risk and restated pre-IPO financial statements are more likely to disclose internal control weaknesses over pre-IPO financial reporting. In addition, I find that voluntary disclosure of internal control weaknesses and the related remediation procedures is negatively associated with underpricing, indicating that ex ante uncertainty about the new issues' value is reduced. Further, IPO firms benefit from such voluntary disclosure through increased IPO proceeds. The results also suggest that the new internal control disclosure requirements under SOX sections 302 and 404 have induced IPO firms to voluntarily disclose internal control weaknesses, contributing to lower information asymmetry between IPO firms and uninformed investors.
