Is the control environment related to financial reporting decisions?

D’Aquila, Jill M.

doi:10.1108/02686909810236334

Cited by 43 publications

(9 citation statements)

References 3 publications

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“…Dechow et al [30] investigated the SEC Enforcement Actions for violations of General Accounting Standards, and found that if the CEO was the founder of the company or on the board, earnings manipulation was more common. D'Aquila [31] confirmed that high-level voices had a big impact on the authenticity of a company's financial reports, and were a manifestation of managerial power. Hunton et al [32] conducted a two-stage regression study of the impact of high-level voices on a company's earnings quality, confirming that high-level voices were directly proportional to a company's earnings quality.…”

Section: The Literature On Managerial Powermentioning

confidence: 87%

Does More Managerial Power Impede or Promote Corporate Tax Avoidance? Evidence from Listed Chinese Companies

Tang

Liu

et al. 2019

Sustainability

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Paying taxes is a form of corporate social responsibility. Corporate tax avoidance effectively reduces operating costs, thereby increasing shareholder returns, but the pros and cons are different for executives. This paper takes data from companies listed in China from 2000 to 2016 to explore the causal relationship between managerial power and corporate tax avoidance, using principal component analysis and entropy weight methodology to construct managerial power. First, we conduct an ordinary least square regression, and then we employ alternative measures to avoid taxation, and use managerial power as a robustness check. Next, we rerun the model by using quantile regression and propensity score matching. Finally, in order to tackle problems with endogeneity, we carry out regressions utilizing instrumental variables and simultaneous regression equations. We conclude that managerial power reduces corporate tax avoidance, and firms with more managerial power have fewer incentives to avoid taxes. The results of this paper can guide the taxation of companies listed on the Chinese market to achieve the full payment of tax obligations by reinforcing managerial power in companies, which improves national taxation and leads to sustained economic growth.

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Section: The Literature On Managerial Powermentioning

confidence: 87%

Does More Managerial Power Impede or Promote Corporate Tax Avoidance? Evidence from Listed Chinese Companies

Tang

Liu

et al. 2019

Sustainability

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“…Scandals such as these are attributable to a weak internal control system (Skinner & Spira, 2003). It is argued that having a strong internal control system is one of the best ways to deter fraud (D'Aquila, 1998;Hemraj, 2004;Holtfreter, 2005;Bierstaker et al, 2006;IIA, 2009). Boards of directors have responsibility over internal control and must timeously communicate to stakeholders such as investors any breakdowns in internal control that could impact investors' decisions (HassabElnaby, Said & Wolfe, 2007;IoD, 2009;Barac & Plant, 2010).…”

Section: Introductionmentioning

confidence: 99%

The impact of COSO control components on internal control effectiveness: An internal audit perspective

Fourie

Ackermann

2013

J. econ. financ. sci.

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Boards of directors have the ultimate responsibility for governance – including internal control – in their organisations. Management is tasked with the design, implementation and maintenance of internal control systems. Internal auditors play a key role in independently evaluating these controls, acting as agents on behalf of the board of directors in order to mitigate the possibility of management not acting in the best interest of the organization, leaving gaps in the internal control system, and, in some instances, doing so in order to enable unlawful personal gain. The Committee of Sponsoring Organisations’ Integrated Framework for Internal Control (hereafter referred to as the COSO framework) is used as a recognised framework, which, if implemented, could result in an effective internal control system and served as the basis for the design of the research instrument of the research. The questionnaire was distributed to internal audit practitioners. Responses were obtained from 31 participants from the Eastern Cape and Western Cape regions in South Africa. The majority of the participants provide internal audit services to the local government sphere of the South African government. This article identifies which characteristics should exist in an organization’s control system that, in the opinion of internal auditors, improve the effectiveness of the internal control system. This study concludes that internal auditors are of the opinion that control characteristics as outlined in the COSO framework for ‘risk assessment’, ‘information and communication’, ‘control activities’ and ‘monitoring’ components of internal control, do contribute to an effective internal control system.

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“…Some of the components of control environment for this study are; corporate culture, Competence levels, Quality of audit committees and Integrity and ethics (D'Aquila, 1998& Ramos, 2004. According to Rae & Subramaniam (2006), the core of any organization is its people and they are the engine that drives the organisation.…”

Section: Control Environmentmentioning

confidence: 99%

The Research of Factors Affecting the Effectiveness of Internal Control Systems in Commercial Banks-empirical Evidence in Viet Nam

Vu¹

2016

IBR

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The purpose of this research was to determine the factors that affect effectiveness of internal control systems in commercial banks in Vietnam. Through the method of qualitative research and quantitative based on reliability Cronbach's Alpha, exploratory factor analysis (EFA) and multiple regression analysis (MRA). According to the report of COSO, BASEL organizations and the other authors, control environment; risk assessment; information and communication; control activities and monitoring could affected the effectiveness of internal control systems in commercial banks. In addition, this research has indicated that there are two new factors have an impact on the effectiveness of internal control systems in commercial banks in Vietnam: political institutions and interest groups.

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Is the control environment related to financial reporting decisions?

Cited by 43 publications

References 3 publications

Does More Managerial Power Impede or Promote Corporate Tax Avoidance? Evidence from Listed Chinese Companies

Does More Managerial Power Impede or Promote Corporate Tax Avoidance? Evidence from Listed Chinese Companies

The impact of COSO control components on internal control effectiveness: An internal audit perspective

The Research of Factors Affecting the Effectiveness of Internal Control Systems in Commercial Banks-empirical Evidence in Viet Nam

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