第一百四十五期财务与会计学术论坛

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题目: The Effect of Voluntary Internal Control Audits on the Cost of Capital 演讲者:Jian Zhou,Associate Professor of Accounting,SUNY at Binghamton 时间: 2011年5月27日(星期五)3:00—4:30PM 地点: 嘉庚二501 参加者: 对会计研究有兴趣的广大师生 主持人: 阮军老师 论文简介: In this paper, we investigate whether companies that voluntarily comply with Section 404(b) of the Sarbanes-Oxley Act of 2002 enjoy a lower cost of capital. Section 404(b) requires an external audit firm’s attestation report on management’s assessment of the company’s internal controls over financial reporting. While accelerated filers have been required to comply with the provisions under Section 404(b) since November 15, 2004, non-accelerated filer compliance has been (and, as of July 21, 2010, will continue to be) voluntary. Using a sample of companies that voluntarily have their internal controls audited by an external auditor and a control group of companies that report on the strength of internal controls but do not have management’s internal control assertions audited, we first model the determinants of voluntary compliance. We find that companies issuing equity or debt and those with stronger monitoring mechanisms (i.e., Big 4 auditors and higher institutional ownership) are more likely to voluntarily comply with Section 404(b). Next, we test whether voluntary compliance companies enjoy a lower cost of capital relative to companies that do not comply with Section 404(b) and whether voluntary compliance companies enjoy a decline in the cost of capital in the first year of compliance. We find that the cost of equity and the cost of debt capital are significantly lower for those companies choosing to have their internal controls audited and that voluntary compliance companies enjoy a reduction in the cost of equity and the cost of debt in the year of voluntary compliance. Our findings are important because they demonstrate an important benefit that small companies can derive from purchasing internal control audits. 讲座人简介: Jian Zhou is a tenured Associate Professor of Accounting at SUNY at Binghamton. Jian has full time teaching experience at Long Island University– Brooklyn Campus, Nanyang Technological University, SUNY at Binghamton and Syracuse University. Jian received his Ph.D. from Syracuse University in 2000. His research interests are in corporate governance, earnings management, internal control, and audit quality. He has 20 papers published or accepted for publication at peer-reviewed journals such as *Contemporary Accounting Research, Journal of Accounting, Auditing and Finance, Journal of Accounting and Public Policy and Accounting Horizons*. His research has been featured in the *Wall Street Journal, SmartMoney* and has been referenced in leading textbook such as *Financial Accounting Theory*. His research has also been requested by Public Company Accounting Oversight Board and cited by a Securities and Exchange Commission study. He has been listed among theSSRN Top 185 Accounting Authors as of August 21, 2002 (Brown and Laksmana 2004). His research has been cited over 400 times in published and working papers according to Google Scholar and has been funded by Canadian Academic Accounting Association, Deloitte, PricewaterhouseCoopers, among others.