Antecedents, Characteristics and Consequences of Internal Control Weaknesses and the COSO (2013) Framework

Journal of Forensic Studies in Accounting & Business 6 (1): 109–136.

43 Pages Posted: 14 Aug 2014 Last revised: 2 Jan 2016

Date Written: February 20, 2014

Abstract

The main thesis of our study is to provide a comprehensive review on the disclosure of Internal Control Weaknesses (ICWs) reported under the Sarbanes-Oxley Act of 2002. More specifically, we classify research on ICWs into three main streams: (1) antecedents, (2) characteristics and (3) consequences of ICWs. Throughout the review, we refer to the multifaceted aspects of the disclosure of ICWs on various important topics such as corporate governance, financial reporting quality, audit quality and information asymmetry. We also discuss the possible implications of the 2013 updated Committee of Sponsoring Organizations (COSO) internal control-integrated framework on accounting literature. Our review and framework help researchers as well as policy makers to better understand the mechanisms by which the existence, discovery and disclosure of ICWs affect the U.S. firms. Further, this study provides avenues for future research and helps regulators and policy makers in setting standards and provisions related to internal controls.

Keywords: Internal Control Material Weaknesses; Sarbanes-Oxley Act 2002; COSO 2013

JEL Classification: G30; M40; M41

Suggested Citation

El Mahdy, Dina and Thiruvadi, Sheela, Antecedents, Characteristics and Consequences of Internal Control Weaknesses and the COSO (2013) Framework (February 20, 2014). Journal of Forensic Studies in Accounting & Business 6 (1): 109–136., Available at SSRN: https://ssrn.com/abstract=2479646 or http://dx.doi.org/10.2139/ssrn.2479646

Dina El Mahdy (Contact Author)

Morgan State University ( email )

4100 Hillen Rd
Baltimore, MD 21218
United States
443-885-3967 (Phone)
443-885-8251 (Fax)

HOME PAGE: http://www.morgan.edu/

Sheela Thiruvadi

Morgan State University ( email )

1700 E. Cold Spring Ln
Baltimore, MD 21251
United States

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