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Internal control reports and financial reporting problems
Article
McMullen, DA, Raghunandan, K, Rama, DV. (1996). Internal control reports and financial reporting problems .
ACCOUNTING HORIZONS,
10(4), 67-75.
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McMullen, DA, Raghunandan, K, Rama, DV. (1996). Internal control reports and financial reporting problems .
ACCOUNTING HORIZONS,
10(4), 67-75.
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cited authors
McMullen, DA; Raghunandan, K; Rama, DV
authors
Raghunandan, Kannan
Rama, Dasaratha
abstract
The issue of internal control reporting has recently been of considerable interest to the accounting profession, and has generated significant controversy. The Treadway Commission, the Public Oversight Board and the Board of Directors of the AlCPA, among others, have suggested that such reporting can serve to enhance internal controls. Others have questioned the usefulness of such reports. This paper provides empirical evidence relevant to the debate about internal control reporting by examining the proportions of companies with two types of financial reporting problems which had prior internal control reports, and compares such proportions to the population proportions. Specifically, we examine companies which either were subject to an SEC enforcement action or corrected previously reported earnings. Results indicate that smaller companies with a financial reporting problem were much less likely to have had a management report on internal control than the population of small companies in the NAARS database. © 1996 American Accounting Association.
publication date
December 1, 1996
published in
ACCOUNTING HORIZONS
Journal
Additional Document Info
start page
67
end page
75
volume
10
issue
4