外文翻译--内部控制失败与公司治理结构的关系后萨班斯法案分析

本科毕业论文 设计 外 文 翻 译 外文题目 Internal Control Failures and Corporate Governance Structures A Post Sarbanes Oxley Act SOX Analysis 外文出处 Georgia Institute of Technology 外文作者 Beng Wee Goh 原文 原文 Internal Control Failures and Corporate Governance Structures A Post Sarbanes Oxley Act SOX Analysis 3 1 Relation between Internal Control Quality and Corporate Governance Structure 3 1 1 Monitoring of Internal Controls by the Board of Directors The findings that weak internal controls result in lower accruals quality and negative stock market reaction lend support to the regulators emphasis on internal controls to improve financial reporting quality Weak internal controls especially if disclosed and allowed to persist can undermine users perception of the credibility of the firm s financial reporting and harm the firm in the long run Despite the importance of internal controls research on what corporate governance mechanisms can ensure effective internal controls is scant Fama and Jensen 1983 contend that boards assume an important role in corporate governance The modern large corporation is characterized by the absence of the classical entrepreneurial decision maker Instead in order to reap the benefits of risk sharing the company s residual claims are diffused among many investors who generally vest their decision rights in individuals with specialized knowledge Agency theory predicts that such delegation of decision to management creates conflicts of interests between managers and residual claimants Agency costs are created because the managers who initiate and implement important decisions are not the major residual claimants and therefore do not bear a major share of the wealth effects of their decisions Without effective control procedures such managers are likely to take actions that deviate from the interests of residual claimants For instance managers can manipulate financial reports or commit fraud to maximize their own self interests and to the detriment of shareholders Fama and Jensen 1983 argue that agency costs can be reduced by institutional arrangements that separate decision management from decision control Separate decision control is required to monitor the actions of the top managers i e CEO or president approving the corporation s strategy and monitoring the control systems of the firms Within the large corporations decision control rights are delegated to the board which represents the highest level of decision control The board helps to reduce conflicts of interests between managers and residual claimants and ensure that management decisions are congruent with shareholders interest Effective internal controls are part of the firm s overall control system that can be used to mitigate agency conflicts and curb managers opportunistic behavior Jensen and Payne 2003 A sound financial reporting system prevents managers from using aggressive accounting to inflate earnings and or stock price and effective internal controls are essential in ensuring the integrity of financial reporting system For instance the maintenance of proper accounting policies and procedures and adequate controls over non routine transactions reduce ambiguities in the interpretation of accounting procedures In turn this can prevent managers from manipulating accounting rules to maximize their self interests Proper internal controls over financial statement closing procedures timely preparation of account reconciliations and account analysis all seek to reduce errors in financial accounting thus ensuring accurate financial reporting Effective internal controls such as the hiring of accounting personnel with high levels of accounting expertise and technical competence with financial accounting standards or SEC filing requirements can enhance the quality of accounting information Jensen and Payne 2003 For instance accounting personnel with high levels of accounting expertise are more likely to capture and report relevant financial information useful for decision making and prepare financial statements in conformance with generally accepted accounting principles GAAP for external parties Highly competent and or experienced accounting personnel are also better able to understand complex accounting issues and deal with non routine accounting transactions Another important internal control that curbs managers opportunistic behavior is the internal audit function Many of the responsibilities of internal auditors are linked directly to the production and monitoring of accounting information One of them is to test evaluate and make recommendations regarding an organization s accounting system and internal controls over financial reporting By doing so internal auditors reduce the risk of fraud and protect assets from theft or loss thus ensuring that accounting information generated by the firm is less susceptible to errors The above discussions highlight the importance of internal controls as a monitoring mechanism that the board uses to reduce agency conflicts and managers opportunistic behavior Reputational concerns provide additional incentives for the board of directors to play a vigilant role in the monitoring of internal controls Fama 1980 and Fama and Jensen 1983 contend that outside directors are generally highreputation members of the business community who view the directorate as a means of further developing their reputations as experts in decision control Directors who demonstrate their superior ability in decision control are rewarded through additional directorships and prestige Hence directors have incentives either to protect or enhance their reputational capital Because weak internal controls are likely to result in lower financial reporting quality Ashbaugh et al 2006a Doyle et al 2007b and harm the directors reputation the board is likely to play a vigilant role in the monitoring of internal controls and financial reporting 3 1 2 Monitoring of Internal Controls by the Audit Committee It is common for the board to delegate duties to a subset of the board The extant literature suggests that the board faces litigation risks for monitoring failures and that directors can mitigate their liability through formation of an effective audit committee Reinstein et al 1984 posit that outside non audit committee directors may be able to demonstrate fulfillment of their fiduciary duties by stating that they relied upon audit committee representations on issues regarding the adequacy of the firm s financial reporting and the audit committee s relationship with the external auditors As such non audit committee directors effectively shift some of the risk of potential financial misstatement to the audit committee Abbott et al 2003 Consequently audit committees would seek to mitigate risk by diligently performing oversight of the firm s accounting functions Studies with findings consistent with the quality of the audit committee being associated with financial reporting outcomes include Carcello and Neal 2003a and Klein 2002b Because internal controls over financial reporting might affect financial reporting outcomes it is expected that more effective audit committees will seek to produce favorable financial reporting outcomes by maintaining effective internal controls Further the profession and regulators are both of the view that one of the duties of the audit committee should be to ensure effective internal controls The Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees 1999 recommends that the audit committee encourage procedures that promote accountability and ensure that management properly develops and adheres to a sound system of internal control The Commission on Public Trust 2003 advocates the requirements of SOX that the audit committee be responsible for the appointment compensation and oversight of the work of the auditors and that the outside auditors and internal auditors report directly to the audit committee Under SOX 301 audit committees of public companies are required to establish procedures for the receipt retention and treatment of complaints regarding accounting internal controls and auditing The importance of the audit committee s role in the oversight of the firm s internal control system has also been highlighted by researchers DeZoort 1997 surveys audit committee members to elicit perceptions of their responsibilities in areas related to financial reporting auditing and overall corporate governance Members consistently rank internal control evaluation as the most important oversight area with financial statement review and internal auditor external auditor evaluation considered highly important Hence the audit committee is expected to play an important role in monitoring internal controls besides the board of directors 3 1 3 Effectiveness of Governance Structures and Internal Control Quality Studies have shown that more effective boards and audit committees are associated with stronger corporate governance Dechow et al 1996 and Beasley 1996 both find that firms with weak corporate governance characteristics such as a lack of an audit committee less independent boards having a CEO who also serves as the Chairman of the board etc are more likely to be subject to fraudulent reporting Klein 2002b and Xie et al 2001 find that more effective boards and audit committees measured by their composition and activity are associated with higher earnings quality Last studies have shown that more effective audit committees are associated with the hiring of external auditors who are more independent Carcello and Neal 2000 and auditors who have greater industry expertise Abbott and Parker 2000 I expect firms with more effective governance structures to have higher quality internal controls More effective audit committees and boards comprised mainly of independent directors are less likely to be influenced by top managers As such they are more likely to protect shareholders interests and implement effective internal controls to curb managers opportunistic behaviors High quality audit committees are more likely to engage in discussions with the internal and external auditors about their assessment of internal control Krishnan 2005 They are also more likely to follow up on concerns about the quality of internal controls by eliciting recommendations for improvement and ensuring that management carries out these recommendations In addition more effective audit committees or boards have higher levels of accounting and financial expertise that enable them to better understand complex internal control issues which is important in attempting to achieve an effective overall internal control system A detailed discussion on how I measure the effectiveness of the firm s governance structure i e the board of directors and audit committee is found in Chapter 4 1 of this study Only two studies directly explore the link between internal control quality and corporate governance structures Krishnan 2005 Krishnan and Visvanathan 2005 Krishnan 2005 examines a sample of firms disclosing internal control problems surrounding auditor changes during the period 1994 2000 She finds that these firms have audit committees that are more independent and have a higher level of expertise compared to a control sample of firms changing auditors but not disclosing internal control problems However because her sample was restricted to firms subject to auditor changes the results may not be generalizable to all firms Further her study is conducted prior to SOX Recent policy changes are likely to intensify the pressures for firms to improve their corporate governance mechanisms making it important to examine whether the results in Krishnan 2005 hold in the post SOX period Perhaps more importantly Krishnan s study is focused on examining the characteristics of the audit committee However the effectiveness of the audit committee may depend on board characteristics For instance the report of the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees 1999 states that audit committee performance relies on the practices and attitudes of the entire board Beasley and Salterio 2001 find that firms with strong board governance attributes are more likely to voluntarily form audit committees composed of members with relevant financial reporting and audit committee knowledge and experience Klein 2002a provides further evidence that audit committee independence increases with board size and board independence Hence failure to control for board characteristics when examining the relation between audit committee characteristics and internal control quality can potentially introduce an endogeneity problem in the regression results Krishnan and Visvanathan 2005 examine the role of audit committees and auditors in the reporting of internal control deficiencies after the passage of SOX The authors find that a higher number of meetings of the audit committee smaller proportion of financial experts in the audit committee and more auditor changes characterize firms that report weaknesses in their internal controls compared to firms with no weaknesses Prior restatements are also higher for firms not reporting such weaknesses However the study does not find differences in the size of the audit committees between firms with and without weaknesses and the authors do not examine the independence of the audit committee nor the board characteristics Based on the discussions above I complement Krishnan 2005 and Krishnan and Visvanathan 2005 by hypothesizing that less effective audit committees and boards of directors are associated with lower internal control quality I examine firms that disclosed MW under SOX 302 which is a more representative sample than that used in Krishnan 2005 By using this sample of firms I am also able to examine whether the results in Krishnan 2005 hold in the post SOX period and whether the results hold when I examine a more comprehensive set of corporate governance characteristics that include both the board and audit committee characteristics Because the incidence of MW is an indication of lower internal control quality I expect that firms with less effective audit committees and boards of directors to be more likely to have MW Soure Beng Wee Goh Internal Control Failures and Corporate Governance Structures A Post Sarbanes Oxley Act SOX Analysis D Georgia Institute of Technology 2007 24 27 译文 译文 内部控制失败与公司治理结构的关系内部控制失败与公司治理结构的关系 后萨班斯法案分析后萨班斯法案分析 3 1 内部控制质量与公司治理结构的关系 3 11 由董事会负责的内部控制监督 内部控制薄弱导致应计质量较低和股市的消极反应 该调查结果表明 监 管机构如果重视内部控制那么可以改善财务报告质量 内部控制薄弱 特别是 披露方面存在缺陷 并且没有及时纠正 可能会影响到用户对公司财务报告可 靠性的看法 从长远来看也会损害到公司的利益 尽管内部控制对公司来说非 常重要 但对于怎样的公司治理机制能确保内部控制有效性的研究还是非常匮 乏的 法玛和詹森 1983 认为 董事会在公司治理中发挥重要的作用 现代大 公司的特点是缺乏优秀的企业家式的决策者 相反 为了获得分担风险的利益 众多拥有公司剩余索取权的投资者把决策权授予了具有专业知识的管理者 代 理理论认为 这种授权管理模式导致了管理人员和剩余索取者之间的利益冲突 代理成本的形成是因为提出和贯彻重要决策的经营者不是主要的剩余要求者 因此管理层不能分享由他们决策而带来的财富效应的主要份额 如果没有一套 行之有效的控制程序 管理层很可能会做出偏离剩余要求者利益的行为 例如 管理者可以操纵财务报告或进行欺诈 最大限度地满足自身利益 这会损害到 股东的利益 法玛和詹森 1983 认为 决策经营和决策控制的分开可以减少代理成本 为了监督高层管理者如首席执行官或总裁的行为 需要限制个人独断专行 审 批公司战略 并监督公司的控制系统 在大公司里 董事会接受股东大会的委 托 行使公司最高的决策控制权 这有助于减少管理人员和剩余索取者之间的 利益冲突 确保管理决策与股东利益相一致 有效的内部控制是公司整体控制系统的一部分 它可以缓解代理冲突 抑 制经理人的机会主义行为 詹森和佩恩 2003 年 一个健全的财务报告制度可 以防止管理层采用激进会计政策虚增收入 抬高股价 而有效的内部控制对确 保财务报告系统的完整性至关重要 举例来说 维护适当的会计政策和程序 对非日常交易进行适当控制 可以减少会计程序解释的歧义 同时 还可以防 止管理层操纵会计政策 最大限度地满足自身利益 对财务报表的关闭程序实 施适当的内部控制 及时进行账账核对和账户分析都是为了尽量减少财务会计 错误 确保财务报告的准确性 有效的内部控制 例如 招聘具有会计专业知识和财务会计准则或美国证 券交易委员会备案要求的技术能力的高级会计人才 可以提高会计信息质量 詹森和佩恩 2003 年 例如 具有高层次会计专业知识的会计人员更容易发 现并报告与决策有用相关的财务信息以及为外部各方编制符合公认会计原则 美国通用会计准则 的财务报表 高素质和 或 有经验的会计人员也能更 好地理解复杂的会计问题和处理非日常交易的会计问题 遏制管理层机会主义行为的另一个重要的内部控制措施就是设立内部审计 部门 内部审计人员的很多责任与信息的产生和监督直接相连 其中之一是对 企业会计制度和财务报告内部控制制度进行测试 评估和提出完善建议 因此 内部审计人员可以降低舞弊风险 防止资产被盗窃或丢失 保证企业的会计信 息不易出错 上述讨论突出了内部控制作为董事会用来缓解代理冲突和遏制管理层机会 主义行为的监测机制的重要性 良好的声誉是董事在监督内部控制时积极履行 职责的额外奖励 法玛 1980 及法玛和詹森 1983 认为 外部董事普遍是 声誉较高的商界人士 这些人把兼任董事看作是提高他们在决策控制中作为专 家的声誉 任职过程中表现出色的董事将会在董事会中确立威信并获得奖励 因此 董事有动力来保护或提高他们的声誉资本 由于内部控制薄弱可能会导 致财务报告质量较低 阿什博等 2006 年 多伊尔等 2007 年 危害董事的 声誉 因此董事会可能会保持警惕监督内部控制和财务报告 3 12 由审计委员会负责的内部控制 董事会把职责分派给下属部门是很常见的 现存文献表明 董事会面临监 测失败的诉讼风险和董事会可以通过成立有效的审计委员会来减轻责任 Reinstein 等 1984 假定非审计委员会董事依靠审计委员会关于公司的财务 报告的充分性和审计委员会与外部审计师的关系的陈述 能够证明他们履行其 受托责任 那么 非审计委员会董事将可以轻易地把一些潜在的金融错报风险 转移给审计委员会 雅培等 2003 年 因此 审计委员会将认真履行公司的 会计监督职能以谋求降低风险 研究与调查结果符合审计委员会质量与财务报 告结果相关的包括 Carcello 和尼尔 2003 年 和克莱因 2002 年 因为财务 报告内部控制可能影响财务报告的结果 它预计越有效的审计委员会将寻求通 过维持有效的内部控制来产生良好的财务报告结果 此外 行业和监管机构都认为确保有效的内部控制是审计委员会职责的一 部分 蓝带委员会关于提高公司审计委员会有效性的建议是 1999 审计委员 会鼓励促进问责制 确保管理层正确发展和健全内部控制制度的程序 公益信 托委员会 2003 支持萨班斯法案的要求 审计委员会对注册会计师事务所的 聘用 薪酬以及工作监督进行负责 而外部审计和内部审计人员直接向审计委 员会报告 根据萨班斯法案 301 条款 上市公司审计委员会应设立程序来处理 关于会计 内部控制和审计方面的投诉 研究人员还强调了审计委员会在公司内部控制系统的监督作用的重要性 DeZoort 1997 通过调查审计委员会成员 征求了