Internal Controls and Conditional Conservatism

Goh, Beng Wee; Li, Dan

doi:10.2308/accr.00000041

Cited by 164 publications

(129 citation statements)

References 48 publications

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“…Our approach and our choices of control variables are consistent with the extensive body of prior research that has adopted these models (e.g. Chen et al 2010;Chung and Wynn 2008;Goh and Li 2011;Ramalingegowda and Yu 2012). We also include the control variables in Francis et al (2009) The results fill a number of gaps in the literature.…”

Section: Robustness Checkssupporting

confidence: 68%

CEO Gender, Ethical Leadership, and Accounting Conservatism

et al. 2014

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Because male CEOs dominate corporate leadership, the literature on top management decision-making suffers from an implicit masculine bias. Although research indicates that males and females are biologically and psychologically different, the leadership characteristics of female CEOs are largely unexplored. Two of these characteristics, risk aversion and ethical sensitivity, are tied to key accounting issues, such as conservatism in financial reporting and steadfast opposition to fraud. In this study, we examine the relationship between CEO gender and accounting conservatism, and find a positive association between the two. Consistent with conventional wisdom, this association appears to be stronger in firms with high rather than low litigation and takeover risks. This study contributes to the ethics literature by highlighting the benefits of gender diversity in upholding the integrity of financial reporting.

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Section: Robustness Checkssupporting

confidence: 68%

CEO Gender, Ethical Leadership, and Accounting Conservatism

et al. 2014

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“…Higher cost of debt would decrease the value of the firm. Goh and Li (2011) find that disclosing internal control weakness (ICWs) for the firms leads to lower conditional conservatism co mpared with those without disclosing ICWs. Fend et at.…”

Section: Prior Research On Internal Control Qualitymentioning

confidence: 99%

Social Trust and Internal Control Quality - Evidence from China

Li¹

2017

IJFR

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This paper investigates the relationship between social trust and internal control quality. It is found that in general, social trust has strongly associated with internal control quality. When the variable NGO substitutes for social trust, the similar result is arisen. Furthermore, when the variable ICQ is more than third quartile in the IC Q index, social trust has positively relationship with the ICQ; on the contrary, when the variable ICQ is less than one quartile in the ICQ index, social trust has negatively relationship with the ICQ. Th is paper also testifies the trust residual that sites out the managerial ability factor fro m trust index is also p ositively related with the variable ICQ at the confidence level of 1%. In sum, trust is associated with internal control quality based on the evidence from China.

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“…The risk of unethical business decisions can be reduced when an internal control structure dealing with the firm's business processes such as internal regulatory systems and clear role assignments is well established. Further, it is much easier to rectify a fault when it occurs in a firm with more governance transparency [35,36]. In terms of financial transparency, business routines embedded in the internal control structure can also affect the accuracy of accounting records, which is associated with the risk of misappropriation.…”

Section: Aspects Of Accounting Behaviormentioning

confidence: 99%

A Credit Scoring Model for SMEs Based on Accounting Ethics

Lee

Sohn

2017

Sustainability

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Various types of government credit guarantee programs exist for small-and medium-sized enterprises (SMEs). The SMEs guaranteed by these programs can resolve their financial difficulties by obtaining loans from banks or being included in a pool for the issuance of primary collateralized bond obligations. However, the loan default rate for these supported firms is high owing to their moral hazard, which can be associated with unethical behavior in the accounting process. Since the stakeholders of credit guarantee programs initiated by the government include not only lenders and borrowers, but also taxpayers, the default risk of moral hazard must be minimized. Thus, an additional evaluation step is required to deal with accounting ethics, which has not thus far been considered in the literature. In this study, we propose an accounting ethics-based credit scoring model as a complementary approach, which can be used to select suitable borrowers. The proposed model is expected to reduce the default rate resulting from the moral hazard associated with unethical accounting behaviors in the supported firms.

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Internal Controls and Conditional Conservatism

Cited by 164 publications

References 48 publications

CEO Gender, Ethical Leadership, and Accounting Conservatism

CEO Gender, Ethical Leadership, and Accounting Conservatism

Social Trust and Internal Control Quality - Evidence from China

A Credit Scoring Model for SMEs Based on Accounting Ethics

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