Innovative IT firms and the internal control environment
by Shoshana Altschuller; Abraham N. Fried; David S. Gelb
International Journal of Technology, Policy and Management (IJTPM), Vol. 16, No. 1, 2016

Abstract: Internal control over financial reporting is mandated by the Sarbanes-Oxley Act of 2002. Given the integral role of information technology (IT) in financial processing and reporting, IT is hypothesised to be a contributor to the strength of a firm's internal controls. This study explores the relationship between innovative use of IT and internal control weaknesses. The analysis indicates that firms that are ranked in the Information Week 500 as innovative users of IT are less likely to be cited by their auditors for internal control weaknesses. Implications include the importance of solid IT governance practices and a strong focus on IT controls in today's heavily IT-enabled business environments.

Online publication date: Sun, 17-Apr-2016

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