Do material weaknesses in information technology-related internal controls affect firms' 8-K filing timeliness and compliance? |
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| Institution: | 1. College of Business and Innovation, University of Toledo, Toledo, OH, United States;2. Robert J. Manning School of Business, University of Massachusetts Lowell, Lowell, MA, United States;3. College of Business, Florida Atlantic University, Boca Raton, FL, United States;1. University of Tokyo, Department of Environmental Systems, 5-1-5, Kashiwanoha, Kashiwa-shi, Chiba-ken 277-8561, Japan;2. University of Tokyo, Department of Social Innovation, 7-3-1, Hongo, Bunkyo-ku, Tokyo 113-8656, Japan;3. University of Tokyo, Department of Technology Management for Innovation, 7-3-1, Hongo, Bunkyo-ku, Tokyo 113-8656, Japan;1. College of Banking and Financial Studies, Muscat, Oman, Curtin University, Perth, WA, Australia;2. School of Accountancy, Massey University, Private Bag 102904, Auckland, New Zealand;1. University of South Florida, 4202 E. Fowler Ave, BSN 3311, Tampa, FL 33620, United States of America;2. University of New Hampshire, 10 Garrison Avenue, Durham, NH 03824, United States of America |
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| Abstract: | Form 8-K reporting represents a different (and relatively unknown) information environment than annual 10-K filings. The current study takes advantage of a unique, comprehensive sample of 118,863 8-K filing event observations to investigate the association between firms' Form 8-K reporting timeliness/compliance with required reporting deadlines and their internal control weaknesses. In addition, the study investigates the association between firms' 8-K reporting and their information technology (IT) related internal control weaknesses. Overall, we find strong and robust evidence of a negative relation between the likelihood of the firm reporting a material internal control weakness and the timeliness and compliance of the firms' 8-K filings. We also find distinguishing effects of weaknesses involving IT-related controls. Given recent interest in IT-related controls and far-reaching reforms with stated objectives of improving disclosure timeliness, increasing the quality of internal controls and improving the quality of accounting information, we believe our results provide insights to accounting information systems academics, regulators, accounting standard setters and other interested observers. |
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