Board Independence and Internal Control Weakness: Evidence from SOX 404 Disclosures
| Autor: | Vijaya B. Marisetty, Yangyang Chen, Cameron Truong, W. Robert Knechel, Madhu Veeraraghavan |
|---|---|
| Přispěvatelé: | RS: GSBE AIM, International Auditing |
| Rok vydání: | 2016 |
| Předmět: |
Economics and Econometrics
media_common.quotation_subject SOX 404 Control (management) Audit committee Accounting Sample (statistics) Audit EMPIRICAL-ANALYSIS CORPORATE GOVERNANCE board independence 0502 economics and business internal control weakness MANAGEMENT QUALITY unitary versus dual leadership Quality (business) g18 - General Financial Markets: Government Policy and Regulation media_common AUDIT COMMITTEE REMEDIATION 050208 finance business.industry Corporate governance 05 social sciences 050201 accounting Independence Dual (category theory) General Financial Markets: Government Policy and Regulation DIRECTORS FRAUD g10 - General Financial Markets: General (includes Measurement and Data) Business CONTROL DEFICIENCIES General Financial Markets: General (includes Measurement and Data) Finance FIRM PERFORMANCE |
| Zdroj: | Auditing-a Journal of Practice & Theory, 36(2), 45-62. American Accounting Association |
| ISSN: | 1558-7991 0278-0380 |
| DOI: | 10.2308/ajpt-51577 |
| Popis: | SUMMARY In this paper, we investigate whether board independence has an impact on the likelihood that a company reports weaknesses in internal controls. Using a sample of 11,226 firm-year observations spanning the period 2004–2012, we establish several findings. First, we document a negative relation between board independence and the disclosure of internal control weaknesses. We also document that the negative relation is stronger for firms with unitary leadership (combined positions of CEO and chairman) than for firms with dual leadership. Next, we show that board independence is associated with both fewer account-specific and company-level weaknesses. Finally, we show that board independence is associated with timely remediation of internal control weaknesses and that the implementation of Auditing Standard No. 5 in 2007 weakens the effect of board independence on the disclosure of ICW. JEL Classifications: G10; G18. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|