外文翻譯--后薩班斯時代的內(nèi)部控制缺陷報告：審計人員與公司治理的作用-展示頁
2025-05-27 07:39本頁面
【正文】 ing corporate governance and financial reporting including the reporting of internal control deficiencies. This paper provides an assessment of the role of two key players, namely audit mittees and auditors in the reporting of internal control deficiencies. Both corporate governance and the role of external auditors have received considerable critical attention consequent to reported accounting scandals at several firms. The quality of governance and the external auditors are likely to play important roles in maintaining good internal controls that are critical to the integrity of financial reporting. We examine a sample of firms that reported internal control deficiencies under section 404 of the Sarbanes Oxley Act and assess the characteristics of audit mittees and auditors for these firms. To this end, we pare firms reporting internal control deficiencies with firms of similar size in the same industry that do not report such deficiencies. We find that firms that report internal control weaknesses are characterized by audit mittees that meet more often and have a lesser proportion of directors who qualify as accounting financial experts. Firms reporting weaknesses are also characterized by greater number of auditor changes and prior restatements of financial statements. These results should be of interest to investors, auditors, and regulators who are interested in imposing new governance rules. INTRODUCTION A significant feature of the SarbanesOxley Act (SOX) (US Congress 2020) is section 404 that requires management’s assessment of the pany’s internal controls over financial reporting and an auditor’s opinion on the management’s Implementing section 404 has bee the top focus of audit mittee members and the enormous costs of implementation have invited some criticism (Solomon amp。 Peecher, 2020).2 The objective of this study is to provide preliminary empirical evidence on the role of two important governance agents, audit mittees and auditors, in reporting internal control deficiencies required under section 404 of the SOX. In studying the disclosures on internal controls under section 404, we assume that firms that report internal control weaknesses are the only firms with such weaknesses and firms that do not report any such weaknesses (firms that we use as control group) are not subject to weaknesses at the time of the study. While we have verified that control firms did not report any weaknesses at the time of the study, it is possible that some of these firms had internal control weaknesses but report them in subsequent periods. To the extent we have misidentified a control firm as one without a weakness, the procedure biases against finding any significant results. We contribute to the literature on internal controls, impact of SOX, and the role of audit mittees. Our finding that the audit mittee activity rather than its position is associated with the timely reporting of internal control deficiencies suggests that future studies have to examine attributes of governance other than size of audit mittee or the number of independent directors because the changes brought about by SOX essentially create uniformity in these variables. Our finding that firms that report internal control deficiencies have lesser proportion of financial experts suggests that the role of expertise is better examined by defining it as a proportion rather than as a dummy variable as done in many auditing studies. Finally, we highlight the role of
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