Auditing Section Research Summaries Space

A Database of Auditing Research - Building Bridges with Practice

This is a public Custom Hive  public

Posts

  • Jennifer M Mueller-Phillips
    The Interactive Effects of Internal Control Audits and...
    research summary posted July 28, 2015 by Jennifer M Mueller-Phillips, tagged 01.0 Standard Setting, 01.04 Impact of 404, 01.05 Impact of SOX, 07.0 Internal Control, 07.05 Impact of 404 on Fees and Financial Reporting Quality 
    Title:
    The Interactive Effects of Internal Control Audits and Manager Legal Liability on Managers' Internal Controls Decisions, Investor Confidence, and Market Prices.
    Practical Implications:

    The results demonstrate a demand for IC audits such that, even in the presence of increased manager liability, the IC audit incrementally motivates managers to spend on improving IC and to provide more consistent and accurate ICFR disclosures. Unlike managers, investors react as though manager liability and IC audits are substitutes. This finding has implications for policymakers as it demonstrates the need to consider the possible differing effects of regulation on managers and investors. Moreover, with respect to regulatory actions to simultaneously implement both manager liability and an IC audit, the results suggest that both mechanisms may not be necessary to improve investors’ confidence and in turn market prices.

    Citation:

    Wu, Y., & Tuttle, B. 2014. The Interactive Effects of Internal Control Audits and Manager Legal Liability on Managers' Internal Controls Decisions, Investor Confidence, and Market Prices. Contemporary Accounting Research 31 (2): 444-468.

  • Jennifer M Mueller-Phillips
    The Spillover of SOX on Earnings Quality in Non-U.S....
    research summary posted March 22, 2016 by Jennifer M Mueller-Phillips, tagged 01.0 Standard Setting, 01.05 Impact of SOX, 14.0 Corporate Matters, 14.01 Earnings Management 
    Title:
    The Spillover of SOX on Earnings Quality in Non-U.S. Jurisdictions.
    Practical Implications:

    The costs and benefits of SOX have been researched by numerous authors, however the benefits outside of the United States have generally been limited to those of firms that are listed on U.S. exchanges. The authors observe improvements in earnings quality for subsidiaries of U.S. firms which file financial reports in Belgium, suggesting that there is a spillover effect of SOX compliance outside of domestic firms. The authors caveat that they cannot determine if the results are driven by improved internal controls or improved audit quality of the parent company, but they show improvement in foreign-filing earnings in spite of these financial reports being generated outside of the U.S. reporting process.

    Citation:

    Dutillieux, W., J.R. Francis, M. Willekens. 2016. The Spillover of SOX on Earnings Quality in Non-U.S. Jurisdictions. Accounting Horizons 30 (1): 23-39.

Filter by Type

Filter by Tag