To inform the debate on the merits of internal control audits, we examine managers' decisions to temporarily exempt newly acquired businesses from Section 404 of the Sarbanes-Oxley Act. We provide evidence that managers are more likely to elect the exemption when expected compliance costs are...

When there is high information asymmetry between directors and managers, independent directors do not have enough information to perform their functions. Only when faced with a good internal information environment can such directors acquire enough information to provide advice and monitor...

The complexity of computerized information systems increases the complexity of the external auditor's assessment of the reliability of a client's internal control systems. The purpose of this study is to investigate the impact of weaknesses in IT related internal controls on the cost of a SOX...

Corporation governance and internal control are generated because of Principal-agent problems, and corporation governance impacts on the internal control audit report lag. This paper examines whether internal audit report lags of Shenzhen Stock Exchange public listed companies is associated with...

We investigate potential differences in audit reporting outcomes between Circular A-133 audits performed by governmental auditors vs. those performed by certified public accounting (CPA) firms. Specifically, we investigate the association between auditor type and the likelihood of...

Engagement quality review is an integral part of the audit process. It is designed to be a quality control mechanism for assessing the quality of an audit engagement. Since the 1990s, the SEC has increased sanctions against partners serving as engagement quality reviewers. Recently, the PCAOB...

We investigate whether auditor size is associated with the disclosure of internal control exceptions among Circular A-133 audits of nonprofit healthcare organizations. Our focus on auditor report outcomes within the nonprofit healthcare sector is timely and relevant, given the sector's growth...

Esta investigación examina cómo el conocimiento cultural del país en el que está localizada una empresa afecta la percepción de los auditores en un ambiente de planificación de una auditoría (controles internos y la posibilidad de riesgo de fraude). El análisis utiliza las dimensiones de...

In this paper we investigate why auditors fail to report material weaknesses in internal controls (ICMWs) in advance of misstated audited financial statements. To address this question, we analyze Public Company Accounting Oversight Board (PCAOB) proprietary data on audit clients' internal...

We test whether PCAOB inspections help remediate auditors' deficiencies in detecting and reporting material internal control weaknesses. After PCAOB inspectors report higher rates of internal control audit deficiencies, we find that auditors respond by increasing their issuance of adverse...