 Bank Regulation/Supervision and Bank AuditingAl (Aloke) Ghosh, Henry Jarva and Stephen G. Ryan European Accounting Review, 2025, vol. 34, issue 4, 1339-1364 Abstract: We investigate how bank regulation and supervision influence banks’ internal control quality, banks’ financial statement reliability, and the effort expended by bank auditors. Using material weaknesses in internal controls disclosed under Section 404 of the Sarbanes-Oxley Act as the proxy for internal control quality, we find that banks exhibit significantly higher internal control quality than comparable nonbank financial firms. Using restatements of financial statements as the proxy for financial statement reliability, we find that banks’ financial reports are more reliable than those of comparable nonbanks. Using audit fees as the proxy for audit effort, we find that auditors expend less effort in audits of banks than in audits of comparable nonbanks. Collectively, our findings suggest that the combination of bank audits and banking regulation/supervision significantly improves banks’ internal control quality and financial statement reliability, despite auditors expending less effort in bank audits compared to nonbanks. Date: 2025 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:euract:v:34:y:2025:i:4:p:1339-1364 Ordering information: This journal article can be ordered from DOI: 10.1080/09638180.2024.2373207 Access Statistics for this article European Accounting Review is currently edited by Laurence van Lent More articles in European Accounting Review from Taylor & Francis Journals |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.