Flashcards
Scientific papers Aschbaugh, Doyle both articles
Cards in this deck (15)
- 1What is the purpose of article by Ashbaugh et al (Effect of Sox Internal Control)?the relation between
internal control quality and idiosyncratic and systematic risk, and the
potential benefits of effective internal control in terms of cost of equity. - 2What does Ashbaugh's study investigate specifically?whether firms that disclose internal control deficiencies
(ICDs) exhibit higher systematic risk, higher idiosyncratic risk, and
higher cost of equity relative to firms with effective internal controls. - 3What does Ashbaugh's study investigate further?we investigate whether managements’ initial disclosures of ICDs and
remediation of previously reported ICDs are related to changes in firms’
cost of equity. - 4What did researchers find?firms with ICDs exhibit significantly
higher betas, idiosyncratic risk, and cost of equity capital relative to firms
not reporting ICDs. - 5What else does Ashbaugh's study indicate?firms that initially disclose ineffective internal
control experience a significant increase in market-adjusted cost of
equity, and firms that subsequently improve their internal control (as evidenced
by an unqualified SOX 404 audit opinion) exhibit a decrease in
market-adjusted cost of equity. - 6What does Doyle's Accrual's quality article study?examine the relation between accruals quality and the internal environment of the firm.
- 7What is H1 of Doyles accrual artice?Material weaknesses in internal control are negatively associated with accruals quality
- 8What Moody says about account specific weaknesses?Account-specific material weaknesses relate to controls over specific account balances or transaction-level processes. Moody's suggests that these types of ma- terial weaknesses are "auditable," and thus do not represent as serious a concern regarding the reliability of the financial statements. C
- 9What is company-level material weaknessesrelate to more fundamental problems such as the control environment or the overall financial reporting process, which may not be able to be ‘audited around’.
- 10What is H2 for Doyle's accrual article?Company-level material weaknesses have a stronger negative relation with accruals quality than account-specific material weaknesses.
- 11What were the results for hypotheses for Doyle's accrual quality article?Both hypotheses were supported.
- 12What is the purpose of Doyle's article about determinants of weaknesses?To examine the determinants of material weaknesses in internal control
over financial reporting. - 13How weakness in internal control is determined?a significant
deficiency, or combination of significant deficiencies, that results in more than a remote
likelihood that a material misstatement of the annual or interim financial statements will
not be prevented or detected’ - 14What Doyle was researching specifically for?More specifically,
(1) firm size,
(2) firm age, ;
(3) financial health,
(4) financial reporting complexity,
(5) rapid growth,
(6) restructuring changes; and
(7) corporate governance - 15What were overall results of Doyle's article about determinants?material weaknesses in internal control are more likely
for firms that are smaller, younger, financially weaker, more complex, growing rapidly,
and/or undergoing restructuring.
Information
- Description
- Business/Economics Flashcards on Scientific papers Aschbaugh, Doyle both articles, created by Archimed Nemes on 13/10/2017.
- Created by
- Archimed Nemes
- Views
- 0
- Rating
More on Auditing and Testing Internal Controls