IT-Related Material Weaknesses In Internal Control: Initial Evidence From SOX Section 404 Reports

Does SOX 404 Have Teeth? Consequences of the Failure to Report Existing Internal Control Weaknesses

We identify a sample of firms with restatements attributable to underlying control weaknesses, some which had previously reported these weaknesses as required by SOX 404 and some of which acknowledged them only after announcing the related restatement. We then examine whether various penalties that could serve as enforcement mechanisms for SOX 404 differ across these two groups. We find no evid...

Examining the Antecedents of Sarbanes-Oxley Section 404 IT Control Weaknesses: An Empirical Study

The current research draws on the agency theory, the IT governance literature, and the executive compensation literature to present a theory of the antecedents of IT control weaknesses as reported under Sections 404 of Sarbanes-Oxley Act. More specifically, this paper examines the association between two categories of governance mechanisms (IT governance mechanisms and IT executive incentive al...

The Real Effects of SOX Section 404: Evidence from Corporate Innovation

This paper exploits a natural quasi-experiment to investigate the effects of the Sarbanes-Oxley Act (SOX) on corporate innovation: firms with a public float under $75 million can delay compliance with Section 404 of the Act. We find a significant decrease in the number of patents and patent citations for firms that are subject to Section 404 compliance relative to firms that are not. This effec...

SOX 404-compliant ERP System Internal Control Framework - The Preliminary Outcome

After the enactment of the Sarbanes-Oxley Act (SOX), the importance of related issues, such as internal controls and information security, has greatly increased. In the first stage of this research, the grounded theory methodology is adopted to explore the necessary internal controls in Information Technology (IT) systems. The control criteria are mapped out in the Criteria for Establishment of...

A Model for Investigating Internal Control Weaknesses