Does the value of cash holdings deteriorate or improve with material weaknesses in internal control over financial reporting?

被引：19

作者：

Huang, Pinghsun ^{[1
]}

Guo, Jun ^{[2
]}

Ma, Tongshu ^{[3
]}

Zhang, Yan ^{[3
]}

机构：

[1] Natl Cheng Kung Univ, Tainan 70101, Taiwan

[2] Rutgers State Univ, Camden, NJ 08102 USA

[3] SUNY Binghamton, Binghamton, NY 13902 USA

来源：

JOURNAL OF BANKING & FINANCE | 2015年 / 54卷

关键词：

Corporate cash holdings; Internal control weaknesses; SOX; 404; CORPORATE GOVERNANCE; CONTRACTING EVIDENCE; AGENCY COSTS; INVESTMENT; INFORMATION; FIRMS; DEBT; QUALITY; DISCLOSURE; RETURNS;

D O I：

10.1016/j.jbankfin.2015.01.007

中图分类号：

F8 [财政、金融];

学科分类号：

0202 ;

摘要：

We find that cash holdings are more valuable for firms disclosing material weaknesses in the Sarbanes-Oxley (SOX) 404 internal control assessments. We estimate that the value spread for firms with weak controls vs. effective controls is about $0.25 for an extra dollar of cash. Our results are not driven by account-level weaknesses but by more severe, company-level weaknesses in internal control over financial reporting (ICFR). Further, the economic consequences of cash resources significantly decrease with the remediation of previously reported material weaknesses. These results suggest that the favorable (precautionary) impact induced by weak ICFR appears to more than offset the adverse (agency) effect entailed by ineffective ICFR. Overall, our results survive alternative variable specifications, sample splits, matched sample analyses, and a variety of controls. Published by Elsevier B.V.

引用

页码：30 / 45

页数：16

共 46 条

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