审计委员会质量、审计师独立性和内部控制的薄弱环节翻译.doc

外文资料 Audit committee quality, auditor independence, and internal control weaknessesYan Zhang, Jian Zhou, Nan ZhouAbstractIn this paper we investigate the relation between audit committee quality, auditor independence, and the disclosure of internal control weaknesses after the enactment of the Sarbanes-Oxley Act. We begin with a sample of firms with internal control weaknesses and, based on industry, size, and performance, match these firms to a sample of control firms without internal control weaknesses. Our conditional logit analyses indicate that a relation exists between audit committee quality, auditor independence, and internal control weaknesses. Firms are more likely to be identified with an internal control weakness, if their audit committees have less financial expertise or, more specifically, have less accounting financial expertise and non-accounting financial expertise. They are also more likely to be identified with an internal control weakness, if their auditors are more independent. In addition, firms with recent auditor changes are more likely to have internal control weaknesses.1. IntroductionThe Sarbanes-Oxley Act (hereafter SOX) of 2002 went into effect on July 30, 2002 to address the increasing concern of investors about the integrity of firms financial reporting, due to scandals involving once well-respected companies, such as Enron and WorldCom and auditors, such as Arthur Andersen. One important aspect of SOX is that it has two sections specifically focusing on internal control issues related to financial reporting. Under Section 302, management is required to disclose all material weaknesses in internal control, when they certify the periodic, annual and quarterly, statutory financial reports. Under Section 404, a firm is required to assess the effectiveness of its internal control structure and procedures for financial reporting and disclose such information in its annual reports. Furthermore, the firms auditor is required to provide an opinion on the assessment made by the management in the same report. Because such mandatory disclosure under SOX provides us with more information on internal controls, we are interested in investigating the determinants of internal control weaknesses in the post-SOX era.We begin with a sample of firms with internal control weaknesses, and, based on industry, size, and performance, match these firms to a sample of control firms without internal control weaknesses. Our conditional logit analyses indicate that a relation exists between audit committee quality, auditor independence, and internal control weaknesses. Firms are more likely to be identified with an internal control weakness, if their audit committees have less financial expertise or, more specifically, have less accounting financial expertise and non-accounting financial expertise. They are also more likely to be identified with an internal control weakness, if their auditors are more independent. In addition, firms with recent auditor changes are more likely to have internal control weaknesses. Our paper is related to several recent papers on the determinants of internal control weaknesses. Krishnan (2005)examines the period prior to the enactment of SOX, when internal control problems are only disclosed in 8-Ks filed by firms when changing auditors. With information collected from 8-K filings, she finds that independent audit committees and audit committees with more financial expertise are significantly less likely to be associated with the incidence of internal control problems. Ge and McVay (2005) and Doyle et al. (forthcoming) find that material weaknesses in internal control are more likely for firms that are smaller, less profitable, more complex, growing rapidly, or undergoing restructuring. Ashbaugh-Skaife et al. (forthcoming) find that firms with more complex operations, recent changes in organization structure, auditor resignation in the previous year, more accounting risk exposure, and less investment in internal control systems are more likely to disclose internal control deficiencies.We document that financial expertise in audit committees continues to be an important determinant of internal control weaknesses after the enactment of SOX. Our findings thus complement those in Krishnan (2005), who studies the pre-SOX period. Focusing on the post-SOX period enables us to take advantage of the wealth of information on internal control unleashed by SOX and to construct a sample of firms with internal control problems from both mandated disclosures in the firms 10-Q and 10-K filings under SOX and information disclosed in 8-K filings when firms change auditors. Consisting of only those firms that change auditors in the pre-SOX period, the sample firms in Krishnan (2005)tend to be smaller in size and are traded on smaller stock exchanges. We avoid this sample selection bias by focusing on the post-SOX period, given that all firms are required to disclose material internal control weaknesses under SOX. In addition, we document that auditor independence is an important determinant of internal control weaknesses. This adds to the literature that supports the hypothesis that auditor independence matters, such as Frankel et al. (2002) and Krishnamurthy et al. (2006). Different from other researchers who also focus on the post-SOX period, such as Ge and McVay (2005), Doyle et al. (forthcoming) and Ashbaugh-Skaife et al. (forthcoming) , we show that audit committee quality, characterized as having more financial expertise or, more specifically, having more accounting financial expertise and non-accounting financial expertise, is an important determinant of internal control weaknesses. In addition, we find that auditor independence, calculated as the ratio of audit fee to total fee, is also a determinant of internal control weaknesses.2. Background and hypothesesSOX emphasizes internal control, which is defined as a process, effected by an entitys board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives, according to the COSO framework. SOX Section 302 (hereafter SOX 302), which went into effect on August 29, 2002, requires management to disclose significant internal control deficiencies, when they certify annual or quarterly financial statements. Specifically, the signing officers, being responsible for internal controls, have evaluated the internal controls within the previous ninety days and reported in their findings: (1) a list of all deficiencies in the internal controls and information on any fraud that involves employees who are involved with internal control activities; (2) any significant changes in internal controls or related factors that could have a negative impact on the internal controls.中文译文审计委员会质量、审计师独立性和内部控制的薄弱环节张燕，周健，周楠摘要本文将探讨在“萨班斯-奥克斯利法案颁布后，审计委员会质量，审计师独立性与披露内部控制薄弱薄弱环节之间的关系。首先，以一个内部控制薄弱的公司为案例，并基于行业，规模和性能，与没有内部控制薄弱环节的公司进行对比。根据假设的罗吉特分析可以表明，审计委员会的质量，审计师的独立性和内部控制薄弱之间存在的关系。如果审计委员会的财务专业知识缺乏，或者更具体地说，缺乏甚至没有会计财务专业知识，那么可以更容易地识别公司内部控制的薄弱环节。如果其审计师独立性更好，也可以更容易识别内部控制的薄弱环节。此外，公司审计师的近期更换更可能出现内部控制的薄弱环节。1 引言“萨班斯-奥克斯利法”（以下简称SOX）于2002年07月30日正式生效，由于曾经备受尊敬的公司，如安然（Enron）和世通公司（WorldCom），以及审计师，如安达信（Arthur Andersen）等被卷入丑闻，该法案得到越来越多投资者对公司财务报告完整性的关注。萨班斯法案的一个重要方面是，它有两部分，都特别注重与财务报告相关的内部控制问题。根据第302条，当管理层要保证周、季度和年度法定财务报告时，就要求披露内部控制的所有重大薄弱环节。根据第404条，公司需要评估其内部控制结构的有效性和财务报告程序，并在其年度报告中披露有关信息。此外，该公司的审计师必须在同一份报告对管理层作出的评估提供意见。因为这种在SOX下的强制性披露为我们提供了内部控制的更多信息，我们感兴趣的是在后SOX时期对内部控制薄弱环节起决定因素的调查。 首先，以一个内部控制薄弱的公司为案例，并基于行业，规模和性能，与没有内部控制薄弱环节的公司进行对比。根据假设的罗吉特分析可以表明，审计委员会的质量，审计师的独立性和内部控制薄弱之间存在的关系。如果审计委员会的财务专业知识缺乏，或者更具体地说，缺乏甚至没有会计财务专业知识，那么可以更容易地识别公司内部控制的薄弱环节。如果其审计师独立性更好，也可以更容易识别内部控制的薄弱环节。此外，公司审计师的近期更换更可能出现内部控制的薄弱环节。 本论文与最近关于内部控制薄弱环节决定因素的一些报道相关。克里希南（2005年）探讨了SOX颁布之前期间的内部控制问题，当时审计师更换只需在由企业提交8-KS的文件中披露。根据8-K文件中收集的信息，她发现，更加独立的审计委员会和具备更多金融专业知识的审计师是不太可能发生内部控制问题。Ge、McVay和Doyle等人（2005）研究发现，对于小型的、盈利少的，更复杂的，增长迅速的，或进行重组的公司，出现内部控制薄弱的可能性更大。Ashbaugh-Skaife等人发现，对于运作更复杂的，近期在组织结构发生