Publication
Title
Management reporting on internal control and accruals quality : insights from a "comply-or-explain" internal control regime
Author
Abstract
Internal control regulation remains the subject of an ongoing global debate among academics, regulators, and practitioners in terms of costs and effectiveness. This is reflected by different internal control regulations in different countries, resulting in varying management's incentives across regulatory regimes. Prior research, however, has primarily focused on the U.S. rules-based setting to study the relationship between internal control regulation and financial reporting. The purpose of this paper is to study the relationship between internal control reporting and accruals quality in an alternative internal control regime based on the ''comply-or-explain principle'' in The Netherlands. We show that in this setting accruals quality is not associated with the description of the internal control system, while there is evidence of a positive association with an unaudited statement of effective internal controls. Further, we find that the noncompliance rate of providing a statement of effective internal controls is relatively high, and that companies give generic explanations for noncompliance or no explanation at all. Overall, insights from different internal control regulatory regimes may further advance our knowledge on internal control regulation effectiveness.
Language
English
Source (journal)
Auditing : a journal of practice and theory. - Sarasota, Fla, 1981, currens
Publication
Sarasota, Fla : 2011
ISSN
0278-0380
1558-7991 [online]
Volume/pages
30:3(2011), p. 181-209
ISI
000294154500008
Full text (Publisher's DOI)
Full text (publisher's version - intranet only)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
Web of Science
Record
Identification
Creation 28.11.2011
Last edited 16.11.2017
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