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Internal Control Weakness and Cost of Equity: Evidence from SOX Section 404 Disclosures.
Accounting Review, 82 (5): 1255 - 1297 (2007)
Аннотация
The article discusses internal control weakness (ICW) and how it affects equity costs as revealed by evidence from Sarbanes-Oxley Act 404 disclosures. The research examines this relation affecting equity costs as it affects firms filing 404 reports with the Securities and Exchange Commission (SEC). The researchers state that they found higher implied equity costs when ICW firms were involved than with a sample of firms disclosing no ICW. But when primitive firm characteristics and analyst forecast bias are considered, the higher costs associated with ICW disappear.
