Do management reports on internal control over financial reporting improve financial reporting?

Thomas D. Dowdell, David N. Herda and Matthew A. Notbohm

Research in Accounting Regulation, 2014, vol. 26, issue 1, 104-109

Abstract: Sections 404a and 404b of the Sarbanes–Oxley Act require management and external auditors, respectively, to report on the adequacy of a company’s internal control over financial reporting (ICFR). Larger public firms were first required to file a management report and have an external audit of ICFR in 2004. Smaller public firms were first required to file a management report on ICFR in 2007 but are exempt from the attestation requirement. We investigate the distinct effect of management reports on financial reporting quality. We find that management reports on ICFR improve reporting quality and demonstrate that there are financial reporting benefits from the management report requirement on its own without attestation.

Keywords: Internal control over financial reporting; Accrual quality; Sarbanes–Oxley Act; Section 404; Management reports (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reacre:v:26:y:2014:i:1:p:104-109

DOI: 10.1016/j.racreg.2014.02.011

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