Department or Administrative Unit
In an attempt to bolster public confidence in the accounting profession, the PCAOB issued several standards that were intended to address weaknesses in audit reporting and to increase public confidence in financial reporting. One of these standards, Auditing Standard No.2, added two opinions on an enterprise’s internal control to audit reporting requirements. This Standard was superseded by Auditing Standard No. 5, which eliminated one of these opinions. The purpose of this paper is to examine the efficacy of the elimination of the auditor’s opinion regarding management’s assessment of internal control. The data in this study were taken from 10-K reports filed by Fortune 500 Companies in 2004-2007. From the 10-K reports, copies of audit reports were gathered for 114 of the 120 largest companies and the opinions (unqualified, qualified, or adverse) were recorded.
Thompson, J.H. & Ward, B.H. (2012). Empirical support for the PCAOB's elimination of the independent auditor's opinion regarding managment's assessment of internal control. International Journal of Accounting and Financial Reporting 2(1), 263-268. DOI: 10.5296/ijafr.v2i1.1950
International Journal of Accounting and Financial Reporting