Detection and Severity Classifications of Sarbanes-Oxley Section 404 Internal Control Deficiencies

Bedard, Jean C.; Graham, Lynford

doi:10.2308/accr.00000036

Cited by 182 publications

(110 citation statements)

References 27 publications

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“…2 Bedard and Graham (2011) note the ambiguity in the wording choices used to define the categories of internal control deficiencies. A significant deficiency does not require an adverse internal control opinion, yet the guidance provided by the Supreme Court specifically uses the word "significantly" in its language to explain what they consider to be material.…”

Section: Audits Of Internal Control Over Financial Reportingmentioning

confidence: 99%

Internal Control Opinion Shopping and Audit Market Competition

et al. 2014

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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 internal control opinion shopping occurs primarily in competitive audit markets. Finally, our results indicate that among auditor dismissal clients, opinion shopping is more likely to occur when dismissals are made relatively late during a reporting period and when audit market competition is high. Our findings have implications for the current policy debate regarding audit quality and audit market competition.

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Section: Audits Of Internal Control Over Financial Reportingmentioning

confidence: 99%

Internal Control Opinion Shopping and Audit Market Competition

et al. 2014

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“…In this theme, the papers relate to internal control unit of companies susceptible to audit, regardless of being a private, public, or nonpro t company. e subthemes are as follows: internal control de ciencies, material weaknesses, volunteer management reporting, e ectiveness, human resources, quality, information technology, public reporting, cost, power, reliability, training, transfer of information to the auditor, investment, and e ciency (Bedard & Graham, 2011;Choi, Choi, Hogan, & Lee, 2013;Ettredge, Li, & Sun, 2006;Krishnan, Rama, & Zhang, 2008). It is a new theme not previously described and it emerges with a good representativeness (6%), present in 11-13 years of the research and in 17-21 journals.…”

Section: Emerging Themesmentioning

confidence: 99%

Research in auditing: main themes

Porte

Saur-Amaral

Pinho

2018

Rev. contab. finanç.

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ABSTRACTe passage of the Sarbanes-Oxley Act (SOX) was a turning point in auditing and in auditors practice for the academic world. Research concerning the characterization of academic production related to auditing is in its third decade. Its analysis is accomplished by means of de nition of keywords, abstracts or title, and information on thematic association within the academic production itself in auditing is undisclosed. In order to revise this gap in auditing literature, this study identi ed the main themes in auditing and their association in post-SOX era by analyzing the content of objectives and hypothesis of 1,650 publications in Web of Science (2002Science ( -2014. e ndings in this study extended those from the study by Lesage and Wechtler (2012) from 16 auditing thematic typologies to 22. e results demonstrate that the themes audit report & nancial statement users, corporate governance, audit market, external audit, socio-economic data of the company, international regulation, and fraud risk & audit risk were the most addressed in the publications about auditing. Corporate governance has a broader association with the other themes in the area. Future researches may use these themes and relate them to the methodologies applied to audit studies.

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“…Our present study builds on already existing works to provide a wider view of internal controls covering all the elements globally accepted and used like COSO and Basel Committee on Banking Supervision. Bedard and Graham (2011) used the US Sox internal controls which focus on financial reporting. Using internal governance for internal controls, it was found that bank internal governance determined its performance and risk reduction (Dedu & Chitan, 2013).…”

Section: Introductionmentioning

confidence: 99%

Internal controls and credit risk relationship among banks in Europe

Akwaa-Sekyi

Moreno

2017

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Purpose: The study purport to investigate the effectiveness of internal control mechanisms, investigate whether evidence of agency problem is found among banks in Europe and determine how internal controls affect credit risk. Findings: There is still high credit risk in spite of measures being implemented by the European Central Bank. Banks have individual entity factors that increase or decrease credit risk. The study finds effective internal control systems because objectives of internal controls are achieved and significantly determine credit risk. Agency problem is confirmed due to significant positive relation with credit risk. There is significant effect of internal controls on credit risk with specific variables as risk assessment, return on average risk weighted assets, institutional ownership, bank size, inflation, interest rate and GDP.-25-Intangible Capital -http://dx.doi.org/10.3926/ic.911 Research limitations/implications:Missing data prevented the use of strongly balanced panel. The lack of flexibility with using quantitative approach did not allow further scrutiny of the nature of variables. However, statistical tests were acceptable for the model used. The study has implications for management and owners of banks to be warry of agency problem because that provides incentive for reckless high risk transactions that may benefit the agent than the principal. Management must engage in actions that profile the company better and enhances value maximization. Rising default risk has tendency to impair corporate image leading to loss of reputational capital. Originality/value:The study provides the use of quantitative approach to measuring certain phenomena within the discipline of internal controls. The study adds to a previous study by same authors and confirming the agency problem in a different approach.

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Detection and Severity Classifications of Sarbanes-Oxley Section 404 Internal Control Deficiencies

Cited by 182 publications

References 27 publications

Internal Control Opinion Shopping and Audit Market Competition

Internal Control Opinion Shopping and Audit Market Competition

Research in auditing: main themes

Internal controls and credit risk relationship among banks in Europe

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