IT internal control weaknesses and firm performance: An organizational liability lens

Stoel, M. Dale; Muhanna, Waleed A.

doi:10.1016/j.accinf.2011.06.001

Cited by 55 publications

(49 citation statements)

References 72 publications

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“…2.1. Background -IT controls IT controls are procedures or policies put in place to provide a reasonable assurance that the technology in a firm operates as intended, that data are reliably stored and that the firm is in compliance with laws and regulations (Stoel and Muhanna, 2011). IT controls include, but are not limited to, controls related to software programs, program implementation, segregation of duties associated with access to computer accounting or financial reporting records, and problems with access to digital data and computer programs (Grant et al, 2008).…”

Section: Background Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…Information technology material weaknesses have adverse effects on a firm's control environment, risk assessment and monitoring and result in less reliable financial reporting and generate more negative consequences (Haislip et al, 2015). These adverse effects result in lower levels of earnings performance (Stoel and Muhanna, 2011), less accurate management forecasts (Li et al, 2012) and more future material weaknesses (Klamm and Watson, 2009;Klamm et al, 2012). Therefore, the disclosure of ITMW is a (negative) signal to the market that chief executives are incompetent in the provision of reasonable assurance of operational effectiveness and efficiency, reliable financial reporting and compliance with laws, regulations and policies.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…First, we obtained data on internal controls from Audit Analytics. We extracted binary values of ITMW for each firm year (e.g., Grant et al, 2008;Stoel and Muhanna, 2011). The value '1' indicates an ITMW problem in a given year for a given firm.…”

Section: Data and Samplementioning

confidence: 99%

“…Previous studies show that firms with ITMW are likely to have more accounting errors, lower accounting earnings and lower management forecast accuracy than those without ITMW (Grant et al, 2008;Stoel and Muhanna, 2011;Li et al, 2012). ITMWs are likely to negatively affect a firm's overall internal control system.…”

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confidence: 99%

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CEO/CFO turnover and subsequent remediation of information technology material weaknesses

Phang

2017

Accounting & Finance

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Adding to prior research on internal control material weaknesses (ICMW), our study investigates whether information technology material weaknesses (ITMWs) are associated with CEO/CFO turnover, and whether their turnover will promote subsequent remediation. We find that disclosures of ITMW are positively associated with CEO/CFO turnover; however, only CEO turnover promotes subsequent remediation. Our findings on ITMW are different from the prior findings on ICMWaligned with prior research on ICMW, ITMWs are associated with CEO/CFO turnover; however, unlike prior research on ICMW suggests, dismissals of CFOs do not promote subsequent remediation of ITMW. Thus, future research should consider ICMW and ITMW separately in the examination of their consequences and remediation.

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Section: Background Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Data and Samplementioning

confidence: 99%

mentioning

confidence: 99%

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CEO/CFO turnover and subsequent remediation of information technology material weaknesses

Phang

2017

Accounting & Finance

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“…In the recent years, intelligent tools have also emerged as one of the important leverages towards CIS (Stoel et al, 2011;Yen, 2007). Data mining has been widely used in establishing CIS (Baesens et al, 2009).…”

Section: Resultsmentioning

confidence: 99%

Data Mining Usage in Corporate Information Security: Intrusion Detection Applications

Quhtani

2017

Business Systems Research Journal

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Background: The globalization era has brought with it the development of high technology, and therefore new methods of preserving and storing data. New data storing techniques ensure data are stored for longer periods of time, more efficiently and with a higher quality, but also with a higher data abuse risk. Objective: The goal of the paper is to provide a review of the data mining applications for the purpose of corporate information security, and intrusion detection in particular. Methods/approach: The review was conducted using the systematic analysis of the previously published papers on the usage of data mining in the field of corporate information security. Results: This paper demonstrates that the use of data mining applications is extremely useful and has a great importance for establishing corporate information security. Data mining applications are directly related to issues of intrusion detection and privacy protection. Conclusions: The most important fact that can be specified based on this study is that corporations can establish a sustainable and efficient data mining system that will ensure privacy and successful protection against unwanted intrusions.

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Environmental, social and governance ratings and firm performance: The moderating role of internal control quality

Boulhaga

Bouri

Elamer

et al. 2022

Corp Soc Responsibility Env

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Despite the burgeoning interest in environmental, social and governance (ESG) ratings, current results regarding ESG rating-performance relationship are inconclusive. Since what affects this disagreement is ambiguous, we examine how internal control weaknesses (ICW) may affect the relationship between ESG rating and a firm's performance.In fact, employing a sample of French listed firms during the period between 2012 and 2018, we predicted and found that both ICW and ESG ratings have a positive and significant influence on a firm's performance. In addition, the results indicate that ICW negatively and significantly moderates the relationship between ESG ratings and corporate performance. Moreover, the robustness of the results is checked through the generalized method of moments regression. We also offer theoretical and practical implications to drive policymakers and businesses to assure sustainable development.We expect that our study can help managers to strengthen their internal resources, such as the internal control (IC) and ESG ratings to improve a firm's performance.

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IT internal control weaknesses and firm performance: An organizational liability lens

Cited by 55 publications

References 72 publications

CEO/CFO turnover and subsequent remediation of information technology material weaknesses

CEO/CFO turnover and subsequent remediation of information technology material weaknesses

Data Mining Usage in Corporate Information Security: Intrusion Detection Applications

Environmental, social and governance ratings and firm performance: The moderating role of internal control quality

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