Premium
The Association between Auditor Industry Specialization and Firms' Disclosure of Internal Control Weaknesses
Author(s) -
RoseGreen Ena,
Huang HuaWei,
Lee ChihChen
Publication year - 2011
Publication title -
international journal of auditing
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.583
H-Index - 21
eISSN - 1099-1123
pISSN - 1090-6738
DOI - 10.1111/j.1099-1123.2011.00430.x
Subject(s) - accounting , audit , business , commission , association (psychology) , control (management) , auditor's report , finance , economics , management , psychology , psychotherapist
In this paper, we examine the association between auditor industry specialization and the disclosure of internal control weaknesses (ICWs) by firms that filed first‐time Section 404 reports with the Securities and Exchange Commission (SEC). Using both univariate and logistic regression analyses, we find that firms audited by industry specialist auditors are more likely to report ICWs than firms audited by non‐specialist auditors. Our results therefore provide further evidence that industry specialist auditors are quality differentiated.