Management Reporting on Internal Control and Accruals Quality: Insights from a "Comply-or-Explain" Internal Control Regime

被引:16
作者
Van de Poel, Katrien [2 ]
Vanstraelen, Ann [1 ,2 ]
机构
[1] Maastricht Univ, Maastricht, Netherlands
[2] Univ Antwerp, Antwerp, Belgium
来源
AUDITING-A JOURNAL OF PRACTICE & THEORY | 2011年 / 30卷 / 03期
关键词
comply-or-explain; internal control; accruals quality; SOX; CONTROL DEFICIENCIES; CONTROL WEAKNESSES; EARNINGS QUALITY; MARKET VALUATION; DISCLOSURE; OWNERSHIP; COST; EQUITY; RISK;
D O I
10.2308/ajpt-10052
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Internal control regulation remains the subject of an ongoing global debate among academics, regulators, and practitioners in terms of costs and effectiveness. This is reflected by different internal control regulations in different countries, resulting in varying management's incentives across regulatory regimes. Prior research, however, has primarily focused on the U. S. rules-based setting to study the relationship between internal control regulation and financial reporting. The purpose of this paper is to study the relationship between internal control reporting and accruals quality in an alternative internal control regime based on the "comply-or-explain principle" in The Netherlands. We show that in this setting accruals quality is not associated with the description of the internal control system, while there is evidence of a positive association with an unaudited statement of effective internal controls. Further, we find that the noncompliance rate of providing a statement of effective internal controls is relatively high, and that companies give generic explanations for noncompliance or no explanation at all. Overall, insights from different internal control regulatory regimes may further advance our knowledge on internal control regulation effectiveness.
引用
收藏
页码:181 / 209
页数:29
相关论文
共 50 条
[41]   The Impact of Occupational Community on the Quality of Internal Control [J].
Campbell, Shelagh ;
Li, Yingqi ;
Yu, Junli ;
Zhang, Zhou .
JOURNAL OF BUSINESS ETHICS, 2016, 139 (02) :271-285
[42]   How does internal control regulation affect financial reporting? [J].
Altamuro, Jennifer ;
Beatty, Anne .
JOURNAL OF ACCOUNTING & ECONOMICS, 2010, 49 (1-2) :58-74
[43]   The Effect of Ownership Structure on Quality of Internal Control [J].
Wu Yibing ;
Liao Yigang ;
Lin Bo .
PROCEEDINGS OF THE 5TH INTERNATIONAL SYMPOSIUM FOR CORPORATE GOVERNANCE, BOOKS 1 AND 2, 2009, :1414-1420
[44]   Auditor Reporting under Section 404: The Association between the Internal Control and Going Concern Audit Opinions [J].
Goh, Beng Wee ;
Krishnan, Jayanthi ;
Li, Dan .
CONTEMPORARY ACCOUNTING RESEARCH, 2013, 30 (03) :970-995
[45]   Do SOX 404 Control Audits and Management Assessments Improve Overall Internal Control System Quality? [J].
Schroeder, Joseph H. ;
Shepardson, Marcy L. .
ACCOUNTING REVIEW, 2016, 91 (05) :1513-1541
[46]   Internal Audit Quality: Insights from Audit Committee Members, Senior Management, and Internal Auditors [J].
Trotman, Andrew J. ;
Duncan, Keith R. .
AUDITING-A JOURNAL OF PRACTICE & THEORY, 2018, 37 (04) :235-259
[47]   The Moderating Role of Internal Control in Tax Avoidance: Evidence from a COSO-Based Internal Control Index in China [J].
Chen, Hanwen ;
Yang, Daoguang ;
Zhang, Xinmin ;
Zhou, Nan .
JOURNAL OF THE AMERICAN TAXATION ASSOCIATION, 2020, 42 (01) :23-55
[48]   Analysis on elements of internal control and quality management in hotel enterprises [J].
Torres Briones, Rosa Marjorie ;
Hurtado Garcia, Ketty del Rocio ;
Garcia Bravo, Mayra Elizabeth ;
Moran Marmolejo, Fabian Medardo .
REVISTA COOPERATIVISMO Y DESARROLLO-COODES, 2021, 9 (03) :905-918
[49]   Discussion on Discrepancy and Blending Internal Control and Quality Management System [J].
Yuan Jingwen ;
Xi Qun ;
Yang Weihua .
EBM 2010: INTERNATIONAL CONFERENCE ON ENGINEERING AND BUSINESS MANAGEMENT, VOLS 1-8, 2010, :2122-2125
[50]   Are voluntary internal control weakness disclosures in initial public offerings associated with managerial ability and subsequent financial reporting quality? [J].
Westfall, Tiffany J. ;
Myring, Mark .
ADVANCES IN ACCOUNTING, 2022, 59