THE STUDY OF THE ABILITY OF SOX 404 INTERNAL CONTROL REPORT TO PREDICT CORPORATE FINANCIAL DISTRESS

• Main Author: 曾黃勇
• Other Authors: 邱垂昌
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/15114724171660865406

碩士 === 國立彰化師範大學 === 會計學系 === 101 === The purpose of the study is to examine the relation of SOX404 internal control report and financial distress.Whether the internal control report could be used to predict a financial crisis ,and whether the report could affect audit opinions which accountants issued for the financial statements forecasting the financial distress. We research on the United States listed or OTC companies which have encountered financial distress from 2004 to 2011. And use logit regression to test internal control report for the financial distress prediction ability. The results showed that whether the establishment of the internal control reporting system or not couldn’t predict corporate financial distress. However, if the company's internal control assessment report issued by accountants is ADVERSE opinion, it means that there are significant internal control weakness exist , which may lead to financial distress. Therefore, the ADVERSE opinion of the internal control report can help predict corporate financial crises. In addition, the empirical results also show internal control report do not affect the ability of audit opinion to forecast the financial distress. In addition, the empirical results indicate that the audit opinion, debt ratio, current ratio, return on total assets, cash to assetsratio and other financial ratiosstill have the ability to forecast financial distress. In summary, in addition to the annual financial ratio trends can help to predict whether a company will face financial distress, the accountant's opinion for the internal control report and the financial statements also have the ability to predict the financial crisis.