Earnings management and instances of material weaknesses reported under Sections 302 and 404
- Authors
- Kwon, Shin Hyoung; Deshmukh, Ashutosh
- Issue Date
- Nov-2022
- Publisher
- City University of Hong Kong
- Keywords
- Internal control weakness; material weakness; earnings management; Sarbanes-Oxley Act (SOX); multiple instances
- Citation
- Asia-Pacific Journal of Accounting and Economics, v.29, no.6, pp 1 - 21
- Pages
- 21
- Indexed
- SSCI
SCOPUS
- Journal Title
- Asia-Pacific Journal of Accounting and Economics
- Volume
- 29
- Number
- 6
- Start Page
- 1
- End Page
- 21
- URI
- https://scholarworks.bwise.kr/erica/handle/2021.sw.erica/446
- DOI
- 10.1080/16081625.2019.1681282
- ISSN
- 1608-1625
2164-2257
- Abstract
- Sections 302 and 404 of the 2002 Sarbanes-Oxley Act require firms to disclose material weaknesses (MWs) in internal controls. We investigate the association of single and multiple instances of MWs with earnings management. Multiple instances are positively associated with earnings management for Section 302 and 404 firms, whereas single instances have no such association for either firm type. Thus, MWs that are not remediated within one quarter or year tend to be positively associated with earnings management and, in particular, with income-decreasing earnings management. Multiple instances of MWs for such firms can therefore provide critical information for auditors and investors.
- Files in This Item
-
Go to Link
- Appears in
Collections - COLLEGE OF BUSINESS AND ECONOMICS > DEPARTMENT OF ACCOUNTING & TAX > 1. Journal Articles
![qrcode](https://api.qrserver.com/v1/create-qr-code/?size=55x55&data=https://scholarworks.bwise.kr/erica/handle/2021.sw.erica/446)
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.