【正文】 中文 4225 字 外 文 翻 譯 外文出處 Auditing: A Journal of Practice amp。 Theory, 2020, 25(2): 2539 外文作者 Scott ， Joseph ， 原文： Firm Characteristics and Voluntary Management Reports on Internal Control SUMMARY:This study provides evidence on the nature of voluntary management reports on internal control MRIC , and on the characteristics of firms issuing suchreports, before internal control reports were mandated under Section 404 of theSarbanesOxley Act. We examine the association between firm characteristics and the voluntary inclusion of an MRIC in the firm?s annual analysis of 397 midsizedfirms in 1998 indicates that a voluntary MRIC is more likely for firms that are larger, have an audit mittee that meets more often, have a greater level of institutional ownership, and have more rapid ine growth. We find that a voluntary MRIC is less likely for panies with more rapid sales growth. Slightly more than onethird of our sample issues an MRIC. None of the voluntary MRICs mention any material weaknesses。 no reports include an auditor attestation。less than half 41 percent of the reports include a statement that controls were effective。and only three of these reports include the criteria used to assess control effectiveness. Keywords:management reports on internal control。 firm characteristics。 corporate Governance. INTRODUCTION Section 404 of the SarbanesOxley Act of 2020 SOX requires Securities and Exchange Commission SEC registrants to include in their annual report a management report on the effectiveness of internal control over financial reporting 404 Report and auditor attestation on this management report. Section 404 has bee arguably the most controversial element of SEC registrants and business associations have plained about the costs associated with the internal control reporting requirement and have called for the revision if not repeal of Section 404 ., American Electronics Association [AEA] 2020。 Advisory Committee on Smaller Public Companies 2020 . While SOX made 404 Reports mandatory, management reports on internal control MRIC were voluntarily included in corporate annual reports prior to SOX. Since including an MRIC in the annual report potentially increased management?s liability exposure under both Rules 10b5 and 14a9 of the securities laws, MRICs were presumably included to signal differences in internal control quality across panies. In this paper, we examine the relation between firm characteristics and the voluntary inclusion of an MRIC in 1998 annual reports. Prior literature suggests that a high proportion of Fortune 100 panies report on controls in their annual reports Raghunandan and Rama 1994 , while a low proportion of smaller panies report on controls McMullen et al. 1996 . Hence, we examine the relation between firm characteristics and the inclusion of a voluntary MRIC for midsized panies because we are looking for a sample that will provide us with reasonable variation with respect to internal control reporting. We also provide descriptive information about the nature and content of these voluntary reports, and we pare and contrast them with the 404 reports. Our analysis includes 397 annual reports ?led by ?rms with total assets between $250 million and $5 billion. We ?nd that 36 percent of midsized panies include an MRIC in their 1998 annual report, and that the likelihood of an MRIC 1 increases with ?rm size, audit mittee meeting frequency, institutional ownership, and ine growth, and 2 decreases with sales growth. None of the reports mention any reportable conditions or material weaknesses。 no reports include an auditor attestation。 less than half 41 percent of the reports include a statement that controls were effective。 and only three of these reports include the