The effect of human resource investment in internal control on the disclosure of internal control weaknesses

Accounting and Finance

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The effect of human resource investment in internal control on the disclosure of internal control weaknesses. / Choi, Jong-Hag ; Choi, Sunhwa; Hogan, Chris et al.
In: Auditing: A Journal of Practice and Theory, Vol. 32, No. 4, 11.2013, p. 169-199.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Choi, J-H, Choi, S, Hogan, C & Lee , J 2013, 'The effect of human resource investment in internal control on the disclosure of internal control weaknesses', Auditing: A Journal of Practice and Theory, vol. 32, no. 4, pp. 169-199. https://doi.org/10.2308/ajpt-50514

APA

Choi, J.-H., Choi, S., Hogan, C., & Lee , J. (2013). The effect of human resource investment in internal control on the disclosure of internal control weaknesses. Auditing: A Journal of Practice and Theory, 32(4), 169-199. https://doi.org/10.2308/ajpt-50514

Vancouver

Choi JH, Choi S, Hogan C, Lee J. The effect of human resource investment in internal control on the disclosure of internal control weaknesses. Auditing: A Journal of Practice and Theory. 2013 Nov;32(4):169-199. Epub 2013 May 2. doi: 10.2308/ajpt-50514

Author

Choi, Jong-Hag ; Choi, Sunhwa ; Hogan, Chris et al. / The effect of human resource investment in internal control on the disclosure of internal control weaknesses. In: Auditing: A Journal of Practice and Theory. 2013 ; Vol. 32, No. 4. pp. 169-199.

Bibtex

@article{ba4d3aded68d46de865ed85140fbcd6e,

title = "The effect of human resource investment in internal control on the disclosure of internal control weaknesses",

abstract = "This paper investigates the effect of human resource investment in internal control over financial reporting on the disclosure of internal control weaknesses at both the firm and the individual department level. Using a unique reporting requirement for Korean listed firms, this study uses the ratio of the number of employees involved with the implementation of internal controls (henceforth IC personnel) to the total number of employees of the firm as a proxy for a firm's human resource investment in internal control. We find that the proportion of IC personnel and the change of the proportion within the firm and several key departments are negatively associated with the disclosure of internal control weaknesses. We also find that a change in IC personnel is positively associated with the likelihood of remediation of the internal control weaknesses. These findings provide valuable insights into the role of human resource investment in determining the strength of a firm's internal controls over financial reporting.",

keywords = "internal control systems, Sarbanes-Oxley Act , internal control personnel , internal control weakness",

author = "Jong-Hag Choi and Sunhwa Choi and Chris Hogan and Joonil Lee",

year = "2013",

month = nov,

doi = "10.2308/ajpt-50514",

language = "English",

volume = "32",

pages = "169--199",

journal = "Auditing: A Journal of Practice and Theory",

issn = "0278-0380",

publisher = "American Accounting Association",

number = "4",

}

RIS

TY - JOUR

T1 - The effect of human resource investment in internal control on the disclosure of internal control weaknesses

AU - Choi, Jong-Hag

AU - Choi, Sunhwa

AU - Hogan, Chris

AU - Lee , Joonil

PY - 2013/11

Y1 - 2013/11

N2 - This paper investigates the effect of human resource investment in internal control over financial reporting on the disclosure of internal control weaknesses at both the firm and the individual department level. Using a unique reporting requirement for Korean listed firms, this study uses the ratio of the number of employees involved with the implementation of internal controls (henceforth IC personnel) to the total number of employees of the firm as a proxy for a firm's human resource investment in internal control. We find that the proportion of IC personnel and the change of the proportion within the firm and several key departments are negatively associated with the disclosure of internal control weaknesses. We also find that a change in IC personnel is positively associated with the likelihood of remediation of the internal control weaknesses. These findings provide valuable insights into the role of human resource investment in determining the strength of a firm's internal controls over financial reporting.

AB - This paper investigates the effect of human resource investment in internal control over financial reporting on the disclosure of internal control weaknesses at both the firm and the individual department level. Using a unique reporting requirement for Korean listed firms, this study uses the ratio of the number of employees involved with the implementation of internal controls (henceforth IC personnel) to the total number of employees of the firm as a proxy for a firm's human resource investment in internal control. We find that the proportion of IC personnel and the change of the proportion within the firm and several key departments are negatively associated with the disclosure of internal control weaknesses. We also find that a change in IC personnel is positively associated with the likelihood of remediation of the internal control weaknesses. These findings provide valuable insights into the role of human resource investment in determining the strength of a firm's internal controls over financial reporting.

KW - internal control systems

KW - Sarbanes-Oxley Act

KW - internal control personnel

KW - internal control weakness

U2 - 10.2308/ajpt-50514

DO - 10.2308/ajpt-50514

M3 - Journal article

VL - 32

SP - 169

EP - 199

JO - Auditing: A Journal of Practice and Theory

JF - Auditing: A Journal of Practice and Theory

SN - 0278-0380

IS - 4

ER -

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