The effect of information technology (IT) material weaknesses in internal control on chief financial officer (CFO) turnover

2021 ◽  
Author(s):  
Kazeem O. Akinyele
Keyword(s):  
Information Technology ◽  
Internal Control ◽  
Chief Financial Officer ◽  
Material Weaknesses

The Severity of Internal Controls over Financial Reporting Deficiencies: Differences among Types and Industries

2014 ◽  
pp. 55-77
Author(s):  
Tatiana Mazza ◽  
Stefano Azzali
Keyword(s):  
Information Technology ◽  
Financial Reporting ◽  
Internal Control ◽  
Service Industry ◽  
Listed Companies ◽  
Internal Controls ◽  
Service Companies ◽  
Finance Industry ◽  
Material Weaknesses ◽  
Fixed Assets

This study analyzes the severity of Internal Control over Financial Reporting deficiencies (Deficiencies, Significant Deficiencies and Material Weaknesses) in a sample of Italian listed companies, in the period 2007- 2012. Using proprietary data the severity of the deficiencies is tested for account-specific, entity level and information technology controls and for industries (manufacturing and services vs finance industries). The results on ICD severity is compared with one of the most frequent ICD (Acc_Period End/Accounting Policies): for account-specific, ICD in revenues, purchase, fixed assets and intangible, loans and insurance are more severe while ICD in Inventory are less severe. Differences in ICD severity have been found in the characteristic account: ICD in loan and insurance for finance industry and ICD in revenue, purchase for manufacturing and service industry are more severe. Finally, we found that ICD in entity level and information technology controls are less severe than account specific ICD in all industries. However, the results on entity level and information technology deficiencies could also mean that the importance of these types of control are under-evaluated by the manufacturing and service companies.

SOX 404 Reported Internal Control Weaknesses: A Test of COSO Framework Components and Information Technology

2009 ◽  
Vol 23 (2) ◽  
pp. 1-23 ◽  
Author(s):  
Bonnie K. Klamm ◽  
Marcia Weidenmier Watson
Keyword(s):  
Information Technology ◽  
Internal Control ◽  
Negative Impact ◽  
Internal Controls ◽  
First Year ◽  
Section 404 ◽  
Sarbanes Oxley ◽  
Material Weaknesses ◽  
Assessment And Monitoring ◽  
Internal Control Weaknesses

ABSTRACT: This paper examines internal controls, from both an information technology (IT) and non-IT perspective, in relation to the five components of the Committee of Sponsoring Organization's Internal Control-Integrated Framework (COSO 1992), as well as the achievement of one of COSO's three objectives-reporting reliability. Our sample consists of 490 firms with material weaknesses reported under Sarbanes-Oxley Section 404 during the first year of compliance. We classify the weaknesses by COSO component and as IT-related or non-IT-related. Our results support the interrelationships of the COSO Framework. The results also show that the number of misstated accounts is positively related to the number of weak COSO components (i.e., scope) and certain weak COSO components (i.e., existence). Firms with IT-related weak components report more material weaknesses and misstatements than firms without IT-related weak components, providing evidence on the pervasive negative impact of weak IT controls, especially in control environment, risk assessment, and monitoring.

Executive Accountants and the Reliability of Financial Reporting

2020 ◽  
Author(s):  
Adrienne Rhodes ◽  
Dan Russomanno
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Research Question ◽  
Positive Association ◽  
Chief Executive ◽  
Future Research ◽  
Chief Financial Officer ◽  
Accrual Quality ◽  
Material Weaknesses ◽  
Executive Officers

Using hand-collected data from mandatory disclosures of executive officers, we examine financial reporting outcomes associated with delegating significant accounting responsibilities to an executive accountant, not concurrently serving as the chief financial officer or chief executive officer. We find executive accountants are associated with a significant reduction in the likelihood of restatement. Moreover, we find evidence of a positive association between executive accountants and accrual quality and faster remediation of material weaknesses in internal control when an executive accountant is present. Taken together, this evidence is consistent with more reliable financial reporting at firms with an executive accountant. In contrast, accountants identified in commonly used datasets (i.e., Execucomp or BoardEx) are not consistently associated with the reliability of financial reporting. We highlight the significant differences between datasets, largely attributable to the objectives and sources of the underlying data. We conclude that Execucomp and BoardEx are not substitute datasets for the executive officers disclosed in firms’ 10-K and proxy statement filings. Furthermore, we caution future research to consider which data are most appropriate in the context of each research question. This paper was accepted by Shiva Rajgopal, accounting.

Pengaruh Kualitas Sumber Daya Manusia, Pemanfaatan Teknologi Informasi, Dan Sistem Pengendalian Intern Terhadap Ketepatwaktuan Pelaporan Keuangan Pemerintah Desa

2018 ◽  
Vol 26 (2) ◽  
pp. 131-143
Author(s):  
Marlinawati Marlinawati ◽  
Dewi Kusuma Wardani
Keyword(s):  
Information Technology ◽  
Control System ◽  
Human Resources ◽  
Financial Reporting ◽  
Internal Control ◽  
Positive Influence ◽  
Internal Control System ◽  
Speed Up ◽  
Village Government

The purpose of this research is to know the influence between the Quality of Human Resources, Utilization of Information Technology and Internal Control System Against Timeliness of Village Government Financial Reporting at Gunungkidul Regency. This research is causative research. The population is the village government in Gunungkidul Regency, especially in Gedangsari subdistrict. Criteria of respondents in the study were to village and village apparatus. We use questionnaire to collect data. We use multiple regression with SPSS program version 16.0 to analyze data. We find that quality of human resources and internal control system have a positive influence on the timeliness of village government financial reporting. On the other hand, utilization of information technology does not influence the timeliness of village government financial reporting. These imply that the quality of human resources and internal control system can speed up the preparation of village government financial reporting.

Real Earnings Management before and after Reporting SOX 404 Material Weaknesses

2015 ◽  
Vol 30 (1) ◽  
pp. 119-141 ◽  
Author(s):  
Tuukka Järvinen ◽  
Emma-Riikka Myllymäki
Keyword(s):  
Earnings Management ◽  
Internal Control ◽  
Internal Controls ◽  
Real Earnings Management ◽  
Public Disclosure ◽  
High Quality ◽  
The Public ◽  
Material Weaknesses ◽  
Internal Control System ◽  
Before And After

SYNOPSIS The purpose of this study is to investigate whether SOX Section 404 material weaknesses manifest in real earnings management behavior. The empirical findings indicate that, compared to companies with effective internal controls, companies with existing material weaknesses in their internal controls engage in more manipulation of real activities (particularly inventory overproduction). This implies that the weak commitment by management to provide effective internal control system and high-quality financial information relates to a tendency to use real earnings management methods. Moreover, we find evidence suggesting that companies employ real earnings management (overproduction and reduction of discretionary expenses) after disclosing previous year's material weaknesses. We conjecture that the public disclosure of material weaknesses induces management to strive to mitigate the expected negative reactions of stakeholders to the disclosure by engaging in real earnings management, which is not easily detected or constrained by outsiders. Overall, this study suggests that material weaknesses in internal controls signal an environment where management is more inclined to employ real earnings management.

Effect Technology Information On Quality Financial Statement With Internal Control As Moderating Variable

2021 ◽  
Vol 2 (1) ◽  
pp. 9-13
Author(s):  
Aris Eddy Sarwono ◽  
Asih Handayani
Keyword(s):  
Information Technology ◽  
Control System ◽  
Financial Reporting ◽  
Internal Control ◽  
Local Governments ◽  
Sampling Technique ◽  
Financial Statement ◽  
Financial Reports ◽  
Internal Control System

The problem with the low quality of financial reports in local governments is the reason this research was conducted. This research was conducted with the aim of analyzing the use of information technology on the quality of financial reports by considering the internal control system (SPI) factor. The location of this research is in the Karisidenan Surakarta area which includes 6 districts and 1 city. The population of this research is all state civil servants (ASN) in local governments who work in accounting. The sampling technique was using purposive sampling method. The results showed that the use of information technology had a positive effect on the quality of financial reporting in local governments, while the internal control system moderated the effect of the use of information technology on the quality of financial reporting in local governments.

scholarly journals PENGARUH SISTEM PENGENDALIAN INTERN, TEKNOLOGI INFORMASI, KUALITAS SUMBER DAYA MANUSIA DAN KOMITMEN ORGANISASI TERHADAP KUALITAS LAPORAN KEUANGAN (STUDI PADA SATKER DI LINGKUNGAN KEMENTERIAN AGAMA KABUPATEN ACEH UTARA)

2017 ◽  
Vol 3 (2) ◽  
pp. 151-167
Author(s):  
Liza Mutiana ◽  
Yossi Diantimala ◽  
Zuraida Zuraida
Keyword(s):  
Information Technology ◽  
Organizational Commitment ◽  
Human Resource ◽  
Internal Control ◽  
Linear Regression Analysis ◽  
Work Unit ◽  
Resource Quality ◽  
Cross Sectional ◽  
Financial Reports ◽  
Analysis Technique

This study aims to examine the effect of the internal control systems, information technology, human resource quality and organizational commitment on the quality of financial reports on the work unit in the Ministry of Religious Affairs of North Aceh Regency either simultaneously or partially. The population of this study is all work unit in the Ministry of Religious Affairs of North Aceh Regency as many as 53 work units. The type of investigation conducted is causal study, with the time used in data collection is cross-sectional, and the analysis unit is organizational. Sources of data used are primary data, obtained through the distribution of questionnaires to KPA and Preparer of financial reports as respondents. Data analysis technique in testing the hypothesis of this study using multiple linear regression analysis technique is a statistical technique used to test the influence between two or more variables and to see the effect of partial and simultaneous. The result of the research shows that internal control system, information technology, human resource quality and organizational commitment have effect on financial report quality at satker in Ministry of Religious Affairs of North Aceh Regency either simultaneously or partially.Penelitian ini bertujuan untuk menguji pengaruh sistem pengendalian intern, teknologi informasi, kualitas sumber daya manusia dan komitmen organisasi terhadap kualitas laporan keuangan pada satker di lingkungan Kementerian Agama Kabupaten Aceh Utara baik secara simultan maupun parsial. Populasi penelitian ini adalah seluruh satker di lingkungan Kementerian Agama Kabupaten Aceh Utara sebanyak 53 satker. Adapun jenis investigasi yang dilakukan adalah jenis studi kausalitas (causal study), dengan waktu yang digunakan dalam pengumpulan data adalah cross-sectional, danunit analisis adalah organisasional. Sumber data yang digunakan adalah data primer, yang diperoleh melalui penyebaran kuesioner kepada KPA dan penyusun laporan keuangan selaku responden. Teknik analisis data dalam menguji hipotesis penelitian ini menggunakan teknik analisis regresi linier berganda yang merupakan teknik statistik yang digunakan untuk menguji pengaruh antara dua atau lebih variabel dan untuk melihat pengaruh secara parsial dan simultan. Hasil penelitian menunjukkan bahwa bahwa sistem pengendalian intern, teknologi informasi, kualitas sumber daya manusia dan komitmen organisasi berpengaruh secara bersama-sama terhadap kualitas laporan keuangan pada satker di lingkungan Kementerian Agama Kabupaten Aceh Utara baik secara simultan maupun parsial.

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