IT Internal Control Weaknesses and Firm Performance

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ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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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.

The Effect of Internal Control Weaknesses on Firm Performance

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ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (91 download)

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Book Synopsis The Effect of Internal Control Weaknesses on Firm Performance by : Aikaterini - Argyro Vachla

Download or read book The Effect of Internal Control Weaknesses on Firm Performance written by Aikaterini - Argyro Vachla and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this study is to investigate the effect of internal control weaknesses on firm performance. It is argued that internal control weaknesses have the potential to increase accounting errors, as well the likelihood of financial fraud and lead to inefficient and ineffective business operations which might harm the performance of the firm (Tseng, 2007). The dataset required for this study is mainly composed of financial statement information and was obtained from Audit Analytics database. The study focuses on those internal control weaknesses identified as material, consistent with SOX requirements. Material weaknesses represent the most severe type of internal weaknesses and their disclosure is mandatory under section 302 of SOX (Doyle et al., 2007). A sample of 778 US companies covering the period from 2007 to 2010 was selected in fixed effects regressions using the least square dummy variable estimator in order to estimate the performance impact of material weaknesses. The primary variable of interest internal control material weaknesses is not statistically significant in the model. As a consequence, the estimation results provide evidence that material internal control weaknesses do not explain variations in firm performance.

Internal Control, Enterprise Risk Management, and Firm Performance

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ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (189 download)

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Book Synopsis Internal Control, Enterprise Risk Management, and Firm Performance by : Chih-Yang Tseng

Download or read book Internal Control, Enterprise Risk Management, and Firm Performance written by Chih-Yang Tseng and published by . This book was released on 2007 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Internal Control and Operational Efficiency

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Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Internal Control and Operational Efficiency by : Qiang Cheng

Download or read book Internal Control and Operational Efficiency written by Qiang Cheng and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study, we examine whether and how internal control over financial reporting affects firm operational efficiency. We find that operational efficiency, derived from the frontier analysis, is significantly lower among firms with material weaknesses in internal control relative to firms without such weaknesses. We document some evidence suggesting that effective internal control leads to greater operational efficiency through reducing the likelihood of misappropriation of corporate resources and through enhancing the quality of internal reports for decision making. We also document that smaller firms benefit more from having effective internal control in terms of operational efficiency. In addition, we find that the market appears to understand the effect of ineffective internal control on operational efficiency: within firms with internal control material weakness, those with more negative market reaction experience a larger deterioration in operational efficiency. Lastly, we find that the firms that remediate their material weaknesses subsequently experience an improvement in operating performance and stock returns, and this effect is mainly driven by the improvement in operational efficiency. Overall, our study extends the literature by presenting systematic evidence on the effects of effective internal control on operational efficiency and firm performance.

Institutional Ownership, Internal Control Material Weakness and Firm Performance

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Publisher :
ISBN 13 :
Total Pages : 47 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Institutional Ownership, Internal Control Material Weakness and Firm Performance by : Alex P. Tang

Download or read book Institutional Ownership, Internal Control Material Weakness and Firm Performance written by Alex P. Tang and published by . This book was released on 2015 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine whether a firm's composition of its institutional ownership affects its likelihood of disclosing material weaknesses in its internal control system under SOX 302 and 404 and, hence, its post-disclosure firm performance. The findings indicate that dedicated institutional investors reduce the likelihood of material weaknesses disclosures while transient institutional investors exacerbate the likelihood of material weaknesses disclosures. Firms identified with material weaknesses in internal control have worse operating performance and stock returns in the post-disclosure period than controlling firms, however, the particular types of institutional investors associated with internal control material weakness disclosures have no net impact on post-disclosure firms' performance.

Internal Control Financial Reporting and Firm Performance

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Publisher :
ISBN 13 :
Total Pages : 232 pages
Book Rating : 4.:/5 (926 download)

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Book Synopsis Internal Control Financial Reporting and Firm Performance by : Lokenathan Palanisamy

Download or read book Internal Control Financial Reporting and Firm Performance written by Lokenathan Palanisamy and published by . This book was released on 2015 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation investigates the subject of mandatory internal control financial reporting enacted by Section 404(a) of the Sarbanes-Oxley Act of 2002 (SOX). The primary research hypothesis inquires about the effect of internal control financial reporting on public companies' firm performance or market value. The empirical results based on the SOX Section 404 internal control assessment reports dataset for the period 2004 to 2013 show that firms with effective internal controls have higher market value and inversely firms with ineffective internal controls have lower market value. In addition the average yearly audit and audit related cost per firm had decreased by about 47%; from a high of $2.7 million in 2004 to $1.6 million in 2012. Further the results indicate that a firm¿s choice of the independent Auditor, Market Exchange to trade in and Industry to operate in, significantly affects its effectiveness in SOX 404.

Proceedings of the 2022 International Conference on Bigdata Blockchain and Economy Management (ICBBEM 2022)

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Publisher : Springer Nature
ISBN 13 : 9464630302
Total Pages : 1730 pages
Book Rating : 4.4/5 (646 download)

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Book Synopsis Proceedings of the 2022 International Conference on Bigdata Blockchain and Economy Management (ICBBEM 2022) by : Daowen Qiu

Download or read book Proceedings of the 2022 International Conference on Bigdata Blockchain and Economy Management (ICBBEM 2022) written by Daowen Qiu and published by Springer Nature. This book was released on 2022-12-28 with total page 1730 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is an open access book. As a leading role in the global megatrend of scientific innovation, China has been creating a more and more open environment for scientific innovation, increasing the depth and breadth of academic cooperation, and building a community of innovation that benefits all. These endeavors have made new contribution to globalization and creating a community of shared future. With the rapid development of modern economic society, in the process of economic management, informatization has become the mainstream of economic development in the future. At the same time, with the emergence of advanced management technologies such as blockchain technology and big data technology, real market information can be quickly obtained in the process of economic management, which greatly reduces the operating costs of the market economy and effectively enhances the management level of operators, thus contributing to the sustained, rapid and healthy development of the market economy. Under the new situation, the innovative application of economic management research is of great practical significance. 2022 International Conference on Bigdata, Blockchain and Economic Management (ICBBEM 2022) will be held on March 25–27, 2022 in Wuhan, China. ICBBEM 2022 will focus on the latest fields of Bigdata, Blockchain and Economic Management to provide an international platform for experts, professors, scholars and engineers from universities, scientific institutes, enterprises and government-affiliated institutions at home and abroad to share experiences, to expand professional fields, to exchange new ideas face to face, to present research results, and to discuss the key challenging issues and research directions facing the development of this field, with a view to promoting the development and application of theories and technologies in universities and enterprises.

Acquirer Internal Control Weaknesses in the Market for Corporate Control

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Publisher :
ISBN 13 :
Total Pages : 51 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Acquirer Internal Control Weaknesses in the Market for Corporate Control by : Masako N. Darrough

Download or read book Acquirer Internal Control Weaknesses in the Market for Corporate Control written by Masako N. Darrough and published by . This book was released on 2017 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines how disclosures regarding internal controls, required by Sections 302 and 404 of the Sarbanes-Oxley Act of 2002 (SOX), affect the market for corporate control. We hypothesize that acquirers with internal control weaknesses (ICWs) make suboptimal acquisition decisions based on poor quality information generated by their ineffective controls over financial reporting. We expect that such acquirers will be more likely to misestimate the value of their targets or the potential synergies from mergers, thereby overpaying for completed deals. Using a treatment sample of acquisitions made by acquirers that have disclosed ICWs and two matched control samples without ICW disclosures, we document that ICW acquirers experience a substantially more negative market response to acquisition announcements and have lower future performance than the two matched control samples without ICW disclosures. Overall, our results suggest that ineffective internal controls hinder decision-making related to mergers and acquisitions (M&A).

Internal Control and Warranty Reserves

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ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Internal Control and Warranty Reserves by : Yi-Chun Chen

Download or read book Internal Control and Warranty Reserves written by Yi-Chun Chen and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior studies indicate that warranty reserves present two major aspects: a contingent liability and an information signal about growth prospects. In addition, managers use warranty accounting as a tool of earnings management to meet or beat earnings targets. In this paper, we hypothesize that Section 404 internal control weakness disclosures can help isolate information signal role of warranty reserves. The results reveal that warranty reserves serve as a stronger information signal for firms with an effective system than those with internal control weaknesses (ICW firms). Specifically, we first find that internal control weaknesses have an adverse effect on the relation between abnormal warranty accruals and future firm performance. Second, we find that investors give a more positive valuation of warranty reserves for firms with effective system than ICW firms. Finally, we find that the negative effect on information signal is more pronounced for material weaknesses related to sales/cost of goods sold and accrual estimation than others. Overall, these findings suggest that internal control report can be used to discriminate between information signal role and other roles served by warranty accruals.

The Effect of the Internal Auditing on Financial Performance

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Publisher : GRIN Verlag
ISBN 13 : 3656943044
Total Pages : 72 pages
Book Rating : 4.6/5 (569 download)

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Book Synopsis The Effect of the Internal Auditing on Financial Performance by : Shakir Al-ghalayini

Download or read book The Effect of the Internal Auditing on Financial Performance written by Shakir Al-ghalayini and published by GRIN Verlag. This book was released on 2015-04-15 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bachelor Thesis from the year 2013 in the subject Business economics - Investment and Finance, , course: Faculty of Commerce - Department of Accounting, language: English, abstract: It was clear from the recent financial scandals and fraud law suits in the international and regional firms that the internal control in general isn't as strong as should and that there are some weaknesses that led to this outcome and that why we are interested to investigate the internal control and the internal observation systems in the listed Palestinian corporations to put the lights on the real reasons and causes for such problem. Many researchers and observers believe that one of the main reasons for such problem is the insufficient reliance on the function of the internal auditor and not assigning this function with its real importance in the companies, especially if we consider how significant is this function becomes as the companies are getting larger and the operations are extending to be more in terms of the volume and the complexity and more importantly the competition is getting tougher among the companies. The internal audit is consider to be a type of the observational procedures that can be used to assess the effectiveness of the other observational and audit procedures and that is why many researchers consider it as the core of concentration in the audit hierarchy that supplement the other tools in ensuring these tools ability to safeguard the companies' assets, make sure about the fairness of the financial data and encourage the commitment in the managerial policies. [...]

Internal Control

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Publisher : Springer Science & Business Media
ISBN 13 : 3790828823
Total Pages : 205 pages
Book Rating : 4.7/5 (98 download)

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Book Synopsis Internal Control by : Olof Arwinge

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.

Dynamics of Deterioration in Internal Control Reported Under SOX 404

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ISBN 13 :
Total Pages : 41 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Dynamics of Deterioration in Internal Control Reported Under SOX 404 by : Chunhua Chen

Download or read book Dynamics of Deterioration in Internal Control Reported Under SOX 404 written by Chunhua Chen and published by . This book was released on 2019 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine why many firms disclose internal control weaknesses (ICW) under section 404 of Sarbanes-Oxley Act after previously reporting effective internal control (IC). We find that about half of the cross-sectional ICW determinant variables either do not change significantly from Year T-1 to Year T or change in a direction that is not expected to cause IC deterioration. The reported deterioration in IC can be attributed to increases in audit fee, management turnover, restatement, financial distress, firm size, and decrease in financial activities. Consistent with an agency hypothesis that managers try to manipulate the IC process when firm performance declines, the reported deterioration in IC is also associated with poor stock returns in the year before disclosure. ICW disclosure is more likely when poor stock return is combined with higher sensitivity of executive compensation to stock price change.

How to Comply with Sarbanes-Oxley Section 404

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Publisher : John Wiley & Sons
ISBN 13 : 0471793930
Total Pages : 334 pages
Book Rating : 4.4/5 (717 download)

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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 John Wiley & Sons. This book was released on 2006-03-31 with total page 334 pages. Available in PDF, EPUB and Kindle. Book excerpt: Praise for How to Comply with Sarbanes-Oxley Section 404, Second Edition "In his Second Edition of How to Comply with Sarbanes-Oxley Section 404, Michael Ramos incorporates new developments and lessons learned in the last two years into the definitive guide on SOX 404 implementation . . . An effective tool not just for consultants, this book is THE reference guide for every corporate manager facing SOX 404 implementation." —David W. Hinshaw Executive Vice President and Chief Financial Officer Southern Community Financial Corporation "Very informative . . . this is a book you can actually sit down and read . . . Michael Ramos is extremely knowledgeable and insightful, and his level of detail related to proper documentation has been invaluable in helping me effectively perform Section 404 consulting engagements . . . This Second Edition contains the most pertinent updates and important PCAOB releases. Most importantly, Mr. Ramos has managed to effectively include real-world examples and lessons learned in the field over the last few years. This has saved me countless hours of research and my clients countless dollars." —Christina M. Wenk, CPA Director-Sarbanes-Oxley Compliance Grassi & Co. "How to Comply with Sarbanes-Oxley Section 404, Second Edition brings practical clarity to this complex topic and guides the reader, step by step, through implementation. Mike Ramos draws on his deep understanding of the technical 404 requirements as well as his keen insights as a storyteller . . . Our firm has used Mike's guides over the years to understand and implement technical standards. This guide will be indispensable as we assist companies in the future." —Michael C. Knowles Partner Frank, Rimerman & Co. LLP

Internal Controls Toolkit

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Publisher : John Wiley & Sons
ISBN 13 : 111955439X
Total Pages : 421 pages
Book Rating : 4.1/5 (195 download)

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Book Synopsis Internal Controls Toolkit by : Christine H. Doxey

Download or read book Internal Controls Toolkit written by Christine H. Doxey and published by John Wiley & Sons. This book was released on 2019-07-23 with total page 421 pages. Available in PDF, EPUB and Kindle. Book excerpt: Step-by-step guidance on creating internal controls to manage risk Internal control is a process for assuring achievement of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations, and policies. This is a "toolkit" approach that addresses a practical need for a series of standards of internal controls that can be used to mitigate risk within any size organization. Inadequate internal controls can cause a myriad of problems that adversely affect its ability to provide reliable, timely, and useful financial and managerial data needed to support operating, budgeting, and policy decisions. Reliable data is necessary to make sound business decisions. • Toolkit approach with detailed controls and risks outlined for key business processes • Foundational for SOX 404 initiatives • Key material to improve internal control efforts • Guidance during M&A projects Poor controls over data quality can cause financial data to be unreliable, incomplete, and inaccurate—this book helps you control that quality and manage risk.

The Impact of Sarbanes-Oxley on Internal Control Remediation

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Publisher :
ISBN 13 :
Total Pages : 19 pages
Book Rating : 4.:/5 (129 download)

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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.

E-Life: Web-Enabled Convergence of Commerce, Work, and Social Life

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Publisher : Springer
ISBN 13 : 3319454080
Total Pages : 253 pages
Book Rating : 4.3/5 (194 download)

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Book Synopsis E-Life: Web-Enabled Convergence of Commerce, Work, and Social Life by : Vijayan Sugumaran

Download or read book E-Life: Web-Enabled Convergence of Commerce, Work, and Social Life written by Vijayan Sugumaran and published by Springer. This book was released on 2016-08-31 with total page 253 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book constitutes the refereed proceedings of the Workshop on E-Business (WeB 2015), held in Fort Worth, Texas, USA, on December 12, 2015. The theme of WeB 2015 was “Leveraging Service Computing and Big Data Analytics for E-Commerce”, and thus the workshop provided an interactive forum by bringing together researchers and practitioners from all over the world to explore the latest challenges of next-generation e-Business systems and the potential of service computing and big data analytics. The 11 full and 17 short papers, which were selected from 45 submissions to the workshop, addressed a broad coverage of technical, managerial, economic, and strategic issues related to e-business, with emphasis on service computing and big data analytics. They employed various IS research methods such as case study, survey, analytical modeling, experiments, computational models, and design science.

The AI Revolution: Driving Business Innovation and Research

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Publisher : Springer Nature
ISBN 13 : 3031543793
Total Pages : 917 pages
Book Rating : 4.0/5 (315 download)

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Book Synopsis The AI Revolution: Driving Business Innovation and Research by : Bahaa Awwad

Download or read book The AI Revolution: Driving Business Innovation and Research written by Bahaa Awwad and published by Springer Nature. This book was released on with total page 917 pages. Available in PDF, EPUB and Kindle. Book excerpt: