Abstract

http://ssrn.com/abstract=646925
 
 

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Citations (6)



 


 



Reporting Internal Control Deficiencies in the Post-Sarbanes-Oxley Era: The Role of Auditors and Corporate Governance


Gopal V. Krishnan


American University; American University - Kogod School of Business

Gnanakumar Visvanathan


George Mason University - Accounting Program

October 2005


Abstract:     
This study addresses the role of audit committees and auditors in the reporting of internal control deficiencies after the passage of the Sarbanes Oxley Act (SOX). We find that a higher number of meetings of the audit committee, lesser proportion of "financial experts" in the audit committee, and more auditor changes characterize firms that report weaknesses in their internal controls compared to firms with no weaknesses. Prior restatements of financial statements are also higher for firms not reporting such weaknesses. The results are robust to controlling for a variety of firm characteristics such as complexity of operations, profitability, and growth. Our results underscore the importance of governance characteristics beyond general firm characteristics in examining the reporting of internal control weaknesses.

Number of Pages in PDF File: 37

Keywords: SOX, Internal Control, Audit Committee, Financial Expert, Section 404

JEL Classification: G34, M41, M49, G38

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Date posted: January 11, 2005  

Suggested Citation

Krishnan, Gopal V. and Visvanathan, Gnanakumar, Reporting Internal Control Deficiencies in the Post-Sarbanes-Oxley Era: The Role of Auditors and Corporate Governance (October 2005). Available at SSRN: http://ssrn.com/abstract=646925 or http://dx.doi.org/10.2139/ssrn.646925

Contact Information

Gopal Krishnan (Contact Author)
American University ( email )
4400 Massachusetts Ave, NW
Washington, DC 20016
United States
American University - Kogod School of Business ( email )
4400 Massachusetts Avenue NW
Washington, DC 20016
United States
Gnanakumar Visvanathan
George Mason University - Accounting Program ( email )
Fairfax, VA
United States
703-993-4236 (Phone)
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