Current Search: Burke, Lawrence S. (x)
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Title
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DOES EMERGING GROWTH COMPANY INVESTOR SKEPTICISM DISSIPATE BEFORE THE FIRST REPORTED INDEPENDENT INTERNAL CONTROL AUDIT RESULTS? AN EMPIRICAL INVESTIGATION.
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Creator
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Burke, Lawrence S., Kohlbeck, Mark, Florida Atlantic University, School of Accounting, College of Business
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Abstract/Description
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This study examines whether emerging growth company (EGC) investors respond to the annual required internal control disclosures over financial reporting (ICFR). I develop three hypotheses to test across the EGC lifecycle. Specifically, I investigate whether the first year ICFR disclosure, the remediation of a previously reported material weakness ICFR disclosure and the EGC exit are associated with the firm’s cumulative abnormal return over a three-day event window. Prior literature has...
Show moreThis study examines whether emerging growth company (EGC) investors respond to the annual required internal control disclosures over financial reporting (ICFR). I develop three hypotheses to test across the EGC lifecycle. Specifically, I investigate whether the first year ICFR disclosure, the remediation of a previously reported material weakness ICFR disclosure and the EGC exit are associated with the firm’s cumulative abnormal return over a three-day event window. Prior literature has observed that ICFR disclosures by management and the ICFR audit opinion can be shown to be informative to investors. However, I am not aware of any study investigating whether the EGC investors respond to this type of information. I find that the reported ICFR disclosures are not associated with cumulative abnormal returns during their initial ICFR report disclosure or upon exit as informative but do respond to the reporting of material weakness remediation.
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Date Issued
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2023
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PURL
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http://purl.flvc.org/fau/fd/FA00014246
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Subject Headings
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Financial statements, Accounting
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Format
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Document (PDF)