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Types Of Restatement Decisions And Ex-Ante Red Flags Of Internal Control Quality

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  • Ya-Fang Wang
  • Yu-Ting Huang

Abstract

We investigate the association between financial restatements and internal controls by examining whether voluntary restatement decisions are associated with internal control quality. We focus on companies’ voluntary restatements because they are more susceptible to the numerous provisions imposed by SOX. Empirical results show that voluntary restatement decisions are associated with internal control deficiencies, particularly when companies of voluntary restatements suffer higher restatement severity. Our findings imply that voluntary restatement decisions may interpret as signals of internal control quality.

Suggested Citation

  • Ya-Fang Wang & Yu-Ting Huang, 2014. "Types Of Restatement Decisions And Ex-Ante Red Flags Of Internal Control Quality," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 8(1), pages 1-8.
    • Handle: RePEc:ibf:gjbres:v:8:y:2014:i:1:p:1-8
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    References listed on IDEAS

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    More about this item

    Keywords

    Internal Control; Voluntary Restatement;

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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