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Research on Audit Quality and Information Content of Internal Control Audit Reports

Received: 17 July 2015     Accepted: 31 July 2015     Published: 12 August 2015
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Abstract

This paper examines investors’ reaction to internal control audit reports by concerning audit quality, we find that companies disclosing unqualified internal control audit reports issued by Big 4 firms have higher earnings response coefficient. So the internal control audit reports can transmit information relevant to investment decisions, but its signals are associated with audit quality

Published in Journal of Finance and Accounting (Volume 3, Issue 5)
DOI 10.11648/j.jfa.20150305.13
Page(s) 128-131
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Internal Control Audit, Audit Quality, Market Reaction

References
[1] Fu Liang Xuan, A study of market reactons on disclosure of internal control assurance reports of listed company,Inner Mongolia University,2010,Master Dissertation.
[2] Healy,P.,Hutton,A.,andPalepu,K., Stock performance and intermediation changes surrounding sustained increases in disclosure,Contemporary Accounting Research, 1999,16,p 485-520.
[3] Hollis Ashbaugh-Skaife,Daniel W.Collins,William R.Kinney Jr.And Ryan Lafond 2009, The Effect Of Sox Internal Control Deficiencies On Firm Risk And Cost Of Equity, Journal Of Accounting Research Vol.47 No.1 [4]Hammersley,J.,Myers,L., and Shakespeare, C., Market Reactions to the Disclosure of Internal Control Weaknesses and to the Characteristics of those Weaknesses under Section 302 of the Sarbanes Oxley Act of 2002, Review of Accounting Studies, 2008, 13,p141-165.
[4] Hammersley,J.,Myers,L., and Shakespeare, C., Market Reactions to the Disclosure of Internal Control Weaknesses and to the Characteristics of those Weaknesses under Section 302 of the Sarbanes Oxley Act of 2002 ,Review of Accounting Studies, 2008, 13,p141-165
[5] Teoh,S.H., and Wong,T.J., Perceived Auditor Quality and the Earnings Response Coefficient,The Accounting Review, 1993,68,p346-366.
[6] Wen Guo Shan, Accounting firm scale, Audit quality and market reactions, Audit and Economy Research,2009,11:p34-45.
[7] Zhang Juan, Li Hu, Wang Bing, Auditor choice, signal transmission and capital structure optimization, Audit and Economy Research,2010,9,p33-39.
[8] Brown, S., and Warner, J.,Using daily stock returns: The case of event studies, Journal of Financial Economics, 1985,3,p3-31.
[9] Collins,D.W.,and Kothari,S.P., An Analysis of Intertemporal Cross-Sectional Determinants of Earnings Response Coefficients, Journal of Accounting & Economics, 1985,11,p143-181.
[10] Ball,R.J.,and Brown, P., An Empirical Evaluation of Accounting Income Numbers, 1968,Journal of Accounting Research,Autumn,p159-178
[11] Ball,R. and Kothari,S. P., Security Returns around Earnings Announcements, The Accounting Review, 1991,10,p718-738.
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  • APA Style

    Wang Meiying. (2015). Research on Audit Quality and Information Content of Internal Control Audit Reports. Journal of Finance and Accounting, 3(5), 128-131. https://doi.org/10.11648/j.jfa.20150305.13

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    ACS Style

    Wang Meiying. Research on Audit Quality and Information Content of Internal Control Audit Reports. J. Finance Account. 2015, 3(5), 128-131. doi: 10.11648/j.jfa.20150305.13

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    AMA Style

    Wang Meiying. Research on Audit Quality and Information Content of Internal Control Audit Reports. J Finance Account. 2015;3(5):128-131. doi: 10.11648/j.jfa.20150305.13

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  • @article{10.11648/j.jfa.20150305.13,
      author = {Wang Meiying},
      title = {Research on Audit Quality and Information Content of Internal Control Audit Reports},
      journal = {Journal of Finance and Accounting},
      volume = {3},
      number = {5},
      pages = {128-131},
      doi = {10.11648/j.jfa.20150305.13},
      url = {https://doi.org/10.11648/j.jfa.20150305.13},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20150305.13},
      abstract = {This paper examines investors’ reaction to internal control audit reports by concerning audit quality, we find that companies disclosing unqualified internal control audit reports issued by Big 4 firms have higher earnings response coefficient. So the internal control audit reports can transmit information relevant to investment decisions, but its signals are associated with audit quality},
     year = {2015}
    }
    

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    JO  - Journal of Finance and Accounting
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Author Information
  • School of Business, Beijing Wuzi University, Beijing, China

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