Internal Control Effectiveness and Insider Trading

2011 ◽  
Author(s):  
Dan Li ◽  
Yong Zhang
Keyword(s):  
Insider Trading ◽  
Internal Control ◽  
Control Effectiveness

Do Small Firms Benefit from Auditor Attestation of Internal Control Effectiveness?

2012 ◽  
Vol 31 (4) ◽  
pp. 115-137 ◽  
Author(s):  
Gopal V. Krishnan ◽  
Wei Yu
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Small Firms ◽  
Securities And Exchange Commission ◽  
Control Effectiveness

SUMMARY While auditor attestation of the effectiveness of internal control over financial reporting (ICFR) is required for firms with a public float of at least $75 million (accelerated filers), the Securities and Exchange Commission (SEC) has delayed auditor attestation for non-accelerated filers several times. The Dodd-Frank Act of 2010 exempts non-accelerated filers from auditor attestation. We examine the relation between auditor attestation and revenue quality for a sample of non-accelerated filers and small accelerated filers. We find that discretionary (abnormal) revenues, our proxy for revenue quality, are lower by about 1.5 percent of total assets for accelerated filers relative to non-accelerated filers. This finding holds even among firms whose management has certified their ICFR to be effective. Overall, the findings support the notion that auditor attestation of the effectiveness of ICFR benefits small accelerated filers via higher revenue quality. We believe our findings are timely and potentially informative to regulators, investors, and others.

scholarly journals Determining Factors of Fraud in Local Government

2022 ◽  
Vol 11 (1) ◽  
pp. 1-8
Author(s):  
Sukhemi Sukhemi ◽  
Indah Ayu Arum Sari ◽  
Inayat Hanum Indriati
Keyword(s):  
Local Government ◽  
Linear Regression ◽  
Multiple Linear Regression ◽  
Internal Control ◽  
Unethical Behavior ◽  
Sampling Method ◽  
Control Effectiveness ◽  
Determining Factors ◽  
Accounting Rules ◽  
Independent Variable

The objectives of this research are to analyze determining factors of fraud in local government. This study used internal control effectiveness, compliance with accounting rules, compensation compliance, and unethical behavior as an independent variable, while fraud as the dependent variable. The research was conducted at Bantul local government (OPD). The sample of this research were 86 respondents. The sample uses a purposive sampling method. The respondent data is analyzed with multiple linear regression. The results showed: Internal control effectiveness has an impact on fraud. Compliance with accounting rules does not affect fraud. Compensations compliance does not affect fraud. Unethical behavior has an impact on fraud.

scholarly journals Internal Control Weakness: A Literature Review

2019 ◽  
Vol 8 (2) ◽  
pp. 121
Author(s):  
Yu Lu ◽  
Diandian Ma
Keyword(s):  
Corporate Governance ◽  
Financial Reporting ◽  
Insider Trading ◽  
Internal Control ◽  
Capital Market ◽  
Information Quality ◽  
Empirical Literature ◽  
Affecting Factors ◽  
Debt Contracting

The purpose of this essay is to review empirical literature on internal control weakness over the past seven years. I use an analysis framework consisting of determinants (corporate governance and other affecting factors) and economic consequences (accounting information quality, market reaction, cost of equity, debt contracting) of weakness disclosure and its remediation. Basic findings of prior studies agree that corporate governance and firm characteristics influence the presence of control problems and their remediation. In turn, the effectiveness of internal control impacts the quality of financing reporting, auditor reaction (auditing fees and audit delays), insider trading and leads to capital market consequences (the weakness disclosures affect debt contracting). More internal control studies combine with capital market and provide evidence that SOX are not always effective. Overall, these findings contribute to profession by suggesting that the disclosures of internal control deficiencies generally convey incremental information on the quality of financial reporting to investors. This review integrates and assesses current internal control weakness research and offers some suggestions for future study.

Roger's Dilemma: A Situational Examination of Ethical Behavior in the Presence of Internal Control Deficiencies

2012 ◽  
Vol 28 (2) ◽  
pp. 337-351 ◽  
Author(s):  
Mark J. Mellon ◽  
Robert Marley
Keyword(s):  
Insider Trading ◽  
Internal Control ◽  
Code Of Ethics ◽  
Legal Protection ◽  
Chief Executive ◽  
Sarbanes Oxley ◽  
Ambiguous Situation ◽  
Ethical Conflicts ◽  
Internal Control Deficiencies ◽  
Definition Of

ABSTRACT: This case exposes students to decision making in an ethically and legally ambiguous situation. It also asks them to practice using their ethical sensitivity by identifying situations where ethical conflicts are present. Students will learn the Securities and Exchange Commission's definition of insider trading and gain an understanding of the Supreme Court's recent interpretations regarding the specifics of what constitutes insider trading. Students will also learn about the legal protection afforded to whistleblowers under the Sarbanes-Oxley Act and learn about the code of ethics requirement applicable to public company's senior financial officers and the chief executive officer. Finally, students will be exposed to the definition of an internal control deficiency and learn how to identify two types of internal control deficiencies.

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