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Full-Text Articles in Business
Internal Control And Operational Efficiency, Qiang Cheng, Beng Wee Goh, Jae Bum Kim
Internal Control And Operational Efficiency, Qiang Cheng, Beng Wee Goh, Jae Bum Kim
Research Collection School Of Accountancy
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 …
Internal Control Opinion Shopping And Audit Market Competition, Nathan J. Newton, Julie Persellin, Dechun Wang, Michael S. Wilkins
Internal Control Opinion Shopping And Audit Market Competition, Nathan J. Newton, Julie Persellin, Dechun Wang, Michael S. Wilkins
Michael S Wilkins
This study examines whether audit clients engage in internal control opinion shopping activities and whether audit market competition appears to facilitate those activities. Regulators have long been concerned about the impact of both audit market competition and opinion shopping on audit quality. We adopt the framework developed in Lennox (2000) to construct a proxy to measure the tendency that clients engage in internal control opinion shopping activities. Our empirical results suggest that clients are successful in shopping for clean internal control opinions. In addition, we find evidence that successful internal control opinion shopping occurs primarily in competitive audit markets. Finally, …
Internal Control Opinion Shopping And Audit Market Competition, Nathan J. Newton, Julie Persellin, Dechun Wang, Michael S. Wilkins
Internal Control Opinion Shopping And Audit Market Competition, Nathan J. Newton, Julie Persellin, Dechun Wang, Michael S. Wilkins
Michael S Wilkins
This study examines whether audit clients engage in internal control opinion shopping activities and whether audit market competition appears to facilitate those activities. Regulators have long been concerned about the impact of both audit market competition and opinion shopping on audit quality. We adopt the framework developed in Lennox (2000) to construct a proxy to measure the tendency that clients engage in internal control opinion shopping activities. Our empirical results suggest that clients are successful in shopping for clean internal control opinions. In addition, we find evidence that successful internal control opinion shopping occurs primarily in competitive audit markets. Finally, …