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An evidential reasoning approach to Sarbanes-Oxley mandated internal control risk assessment

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  • Mock, Theodore J.
  • Sun, Lili
  • Srivastava, Rajendra P.
  • Vasarhelyi, Miklos

Abstract

In response to the enactment of the Sarbanes-Oxley Act 2002 and of the release of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5, this study develops a risk-based evidential reasoning approach for assessing the effectiveness of internal controls over financial reporting (ICoFR). This approach provides a structured methodology for assessing the effectiveness of ICoFR by considering relevant factors and their interrelationships. The Dempster-Shafer theory of belief functions is utilized for representing risk.

Suggested Citation

  • Mock, Theodore J. & Sun, Lili & Srivastava, Rajendra P. & Vasarhelyi, Miklos, 2009. "An evidential reasoning approach to Sarbanes-Oxley mandated internal control risk assessment," International Journal of Accounting Information Systems, Elsevier, vol. 10(2), pages 65-78.
    • Handle: RePEc:eee:ijoais:v:10:y:2009:i:2:p:65-78
    DOI: 10.1016/j.accinf.2008.10.003
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    References listed on IDEAS

    as
    1. Grimlund, Ra, 1982. "An Integration Of Internal Control-System And Account Balance Evidence," Journal of Accounting Research, Wiley Blackwell, vol. 20(2), pages 316-342.
    2. Srivastava, Rp, 1986. "Auditing Functions For Internal Control-Systems With Interdependent Documents And Channels," Journal of Accounting Research, Wiley Blackwell, vol. 24(2), pages 422-426.
    3. Chambers, Ae & Penman, Sh, 1984. "Timeliness Of Reporting And The Stock-Price Reaction To Earnings Announcements," Journal of Accounting Research, Wiley Blackwell, vol. 22(1), pages 21-47.
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    Citations

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    Cited by:

    1. Srivastava, Rajendra P., 2011. "An introduction to evidential reasoning for decision making under uncertainty: Bayesian and belief function perspectives," International Journal of Accounting Information Systems, Elsevier, vol. 12(2), pages 126-135.
    2. Heise, David & Strecker, Stefan & Frank, Ulrich, 2014. "ControlML: A domain-specific modeling language in support of assessing internal controls and the internal control system," International Journal of Accounting Information Systems, Elsevier, vol. 15(3), pages 224-245.
    3. Abernathy, John L. & Barnes, Michael & Stefaniak, Chad, 2013. "A summary of 10 years of PCAOB research: What have we learned?," Journal of Accounting Literature, Elsevier, vol. 32(1), pages 30-60.
    4. Jans, Mieke & Lybaert, Nadine & Vanhoof, Koen, 2010. "Internal fraud risk reduction: Results of a data mining case study," International Journal of Accounting Information Systems, Elsevier, vol. 11(1), pages 17-41.
    5. Dieter De Smet & Anne-Laure Mention, 2011. "Improving auditor effectiveness in assessing KYC/AML practices: Case study in a Luxembourgish context," Managerial Auditing Journal, Emerald Group Publishing, vol. 26(2), pages 182-203, January.
    6. Hironori Fukukawa & Theodore J. Mock & Rajendra P. Srivastava, 2014. "Assessing the Risk of Fraud at Olympus and Identifying an Effective Audit Plan," The Japanese Accounting Review, Research Institute for Economics & Business Administration, Kobe University, vol. 4, pages 1-25, December.

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