The Influence of Internal Control Weaknesses on Firm Performance

Authors

  • Syou-Ching Lai Tainan Christian University
  • Hungchih Li National Cheng Kong University
  • Henghsiu Lin University of Portland
  • Frederick Wu University of North Texas (Emeritus)

Keywords:

Accounting, Finance, Internal Control, Technology

Abstract

This study investigates the effect of internal control (IC) weaknesses on firm performance. Our findings confirm that IC weaknesses, in general, have a negative impact on firm performance and that this impact varies with each of the major IC components. Our findings confirm that IC material weaknesses in a firm’s control environment, information technology, accounting documentation, accounting policies and procedures, or control design have a significantly negative impact on firm performance. We also confirm that delaying remedial actions addressing IC weaknesses will continue to hamper firm financial performance.

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Published

2017-09-01

How to Cite

Lai, S.-C., Li, H., Lin, H., & Wu, F. (2017). The Influence of Internal Control Weaknesses on Firm Performance. Journal of Accounting and Finance, 17(6). Retrieved from https://articlegateway.com/index.php/JAF/article/view/930

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Section

Articles