How Does Internal Control Regulation Affect Financial Reporting?

Autor:	Jennifer Lynne M. Altamuro, Anne Beatty
Rok vydání:	2009
Předmět:	Finance Economics and Econometrics business.industry education Control (management) Earnings persistence Accounting Audit Internal control Affect (psychology) Corporation Interim Earnings quality Financial crisis Business Predictability health care economics and organizations
Zdroj:	SSRN Electronic Journal.
ISSN:	1556-5068
DOI:	10.2139/ssrn.930690
Popis:	Internal control regulation effectiveness remains controversial given the recent financial crisis. To address this issue we examine the financial reporting effects of the Federal Depository Insurance Corporation Improvement Act (FDICIA) internal control provisions. Exemptions from these provisions for banks with assets under $500 million and for non-US banks provides two unaffected control samples. Our difference-in-differences method suggests that FDICIA-mandated internal control requirements increased loan-loss provision validity, earnings persistence and cash-flow predictability and reduced benchmark-beating and accounting conservatism for affected versus unaffected banks. More pronounced effects in interim versus fourth quarters suggest that greater auditor presence substitutes for internal control regulation.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::d9935e893125358689cc740513e45b8e https://doi.org/10.2139/ssrn.930690 Zobrazit plný text záznamu