|
Internal Governance, External Governance, and Improvements in Internal Control Quality
Chan Li, University of Kansas
Kathleen Hertz Rupley, Portland State University
ABSTRACT. In light of the recently enacted governance laws to protect shareholder interests via improving internal control quality, we examine governance characteristics of firms with internal control quality remediations in the second year of the SOX Section 404 internal control reports. Compared to firms continuing to report internal control weaknesses, evidence indicates that firms with internal control remediations are larger, have fewer segments, and have better governance. Evidence indicates that internal governance characteristics predominantly explain the differences between firms with internal control remediations and firms that continue to report internal control weaknesses and that internal governance, as related to top management, board of directors, and audit committees, is each incrementally significant.
Full-Text is no longer available online. Please contact the author(s) for more information about this manuscript.
Back to Session Listing
|