Internal Controls and Conditional Conservatism

• Main Authors: GOH, Beng Wee, LI, Dan
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2011
• Subjects: internal controls; conservatism; material weaknesses; Sarbanes-Oxley Act; Accounting; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/778; https://ink.library.smu.edu.sg/context/soa_research/article/1777/viewcontent/SSRN_id1340286.pdf
• Institution: Singapore Management University

This study examines the relation between internal controls and conditional conservatism (“conservatism”), also referred to as timely loss recognition. Using a sample of firms that disclose material weaknesses (MWs) in internal controls under the Sarbanes-Oxley Act (SOX), we find a positive relation...