Lawrence, A, Minutti-Meza, M and Vyas, D (2018) Is operational control risk informative of financial reporting deficiencies? Auditing: A Journal of Practice and Theory, 37 (1). pp. 139-165. ISSN 0278-0380
Abstract
This study provides evidence concerning the significance of assessing operational control risk as part of an integrative evaluation of internal controls. We examine whether operational control risk indicators can be used as cues to potential unreported financial reporting control weaknesses and financial reporting deficiencies. We use data breaches and an operational control risk index, created through textual analysis of Form 10-Ks, as our two primary indicators of operational control risk. We find positive relations between our operational control risk indicators and future financial reporting control weaknesses, restatements, SEC comment letters, and audit fees, even after controlling for contemporaneous financial reporting control weaknesses. These findings suggest that operational control risk is informative of potential financial reporting deficiencies.
More Details
Item Type: | Article |
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Subject Areas: | Accounting |
Date Deposited: | 19 Dec 2017 15:07 |
Subjects: |
Operations control Financial reporting Risk |
Last Modified: | 13 Oct 2024 00:42 |
URI: | https://lbsresearch.london.edu/id/eprint/945 |