Factors related to internal control disclosure: A discussion of Ashbaugh, Collins and Kinney (2007), and Doyle, Ge and McVay (2007), Journal of Accounting and Economics
Ashbaugh, Collins, and Kinney, henceforth ACK, and Doyle, Ge, and McVay, henceforth DGM, provide the first evidence relating firm characteristics to internal control deficiencies (ICDs) reported under new disclosure requirements. Both studies document that control risk factors associated with organizational complexity and significant organizational change, as well as relative investment in internal control systems, are related to disclosure of internal control. ACK also test whether factors associated with incentives to discover and report ICDs affect disclosure of ICDs but this evidence is less compelling. I present alternative explanations and provide some descriptive evidence that is consistent with these alternative explanations.
Leone, Andrew J.. 2007. Factors related to internal control disclosure: A discussion of Ashbaugh, Collins and Kinney (2007), and Doyle, Ge and McVay (2007). Journal of Accounting and Economics. 44(1-2): 224-237.LINK