scholarly journals Internal Control Quality and Underinvestment under the Perspective of Corporate Life Cycle

2016 ◽  
Vol 8 (6) ◽  
pp. 141
Author(s):  
Yan Liu
Keyword(s):  
Life Cycle ◽  
Internal Control ◽  
Financing Constraints ◽  
Maturity Stage ◽  
Agency Conflicts ◽  
Control Quality ◽  
Chinese Listed Companies ◽  
Corporate Life Cycle ◽  
Owned Company ◽  
The Impact

This study examines the impact of internal control quality on corporate underinvestment from the perspective of dynamic development at different stages of life cycle, based on the sample of Chinese listed companies. I show that: at the growing stage, corporate underinvestment is mainly caused by financing constraints, at the maturity stage and recession stage, corporate underinvestment is caused by financing constraints and different kinds of agency conflicts. I also find that at different stages of life cycle, the impact of internal control quality on underinvestment is different. At the growing stage，the impact of internal control quality on underinvestment is not significant, at the maturity stage, high quality internal control can inhibit underinvestment significantly, at the recession stage, only in non state-owned company, internal control can inhibit underinvestment significantly, in state-owned company, the relationship is not significant.

scholarly journals FINANCING CONSTRAINTS, INTERNAL CONTROL QUALITY AND COST STICKINESS

2021 ◽  
Vol 22 (5) ◽  
pp. 1231-1251
Author(s):  
Yufeng Chen ◽  
Yanbai Ma
Keyword(s):  
Internal Control ◽  
Financing Constraints ◽  
Equity Financing ◽  
Promoting Effect ◽  
Moderation Effect ◽  
Listed Firms ◽  
Control Quality ◽  
Internal Financing ◽  
The Impact ◽  
Cost Stickiness

Managers think that retaining resources is more effective than rebuilding resources after exhausting them. However, financing constraints have brought great uncertainty to this resource decision-making implemented by managers. Data of manufacturing listed firms in China from 2009 to 2017 are used here to explore the impact of financing constraints on cost stickiness. This paper finds that internal financing constraints have a significant promoting effect on cost stickiness, while debt financing constraints and equity financing constraints have a significant restraining effect on cost stickiness. The internal control quality has a moderation effect on this relationship. In a firm with low quality of internal control, internal financing constraints can enhance cost stickiness, but the weakening effect of external financing on cost stickiness is not affected by internal control quality.

scholarly journals The impact of inclusive business on ethical values & internal control quality: an accounting perspective

2016 ◽  
Vol 5 (4) ◽  
pp. 106-113 ◽  
Author(s):  
Tamer El Nashar
Keyword(s):  
Probability Distribution ◽  
Internal Control ◽  
Random Variable ◽  
Ethical Values ◽  
Discrete Probability ◽  
Control Quality ◽  
Inclusive Business ◽  
Potential Impact ◽  
Business Approach ◽  
The Impact

The objective of this paper is to examine the impact of inclusive business on the internal ethical values and the internal control quality while conceiving the accounting perspective. I construct the hypothesis for this paper based on the potential impact on the organizations’ awareness to be directed to the inclusive business approach that will significantly impact the culture of the organizations then the ethical values and the internal control quality. I use the approach of the expected value and variance of random variable test in order to analyze the potential impact of inclusive business. I support the examination by discrete probability distribution and continuous probability distribution. I find a probability of 85.5% to have a significant potential impact of the inclusive business by 100% score on internal ethical values and internal control quality. And to help contribute to sustainability growth, reduce poverty and improve organizational culture and learning.

scholarly journals The Interplay between Working Capital Management and a Firm’s Financial Performance across the Corporate Life Cycle

2020 ◽  
Vol 12 (4) ◽  
pp. 1661 ◽  
Author(s):  
Zanxin Wang ◽  
Minhas Akbar ◽  
Ahsan Akbar
Keyword(s):  
Life Cycle ◽  
Firm Performance ◽  
Financial Performance ◽  
Life Cycle Stage ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Conservative Strategy ◽  
Corporate Life Cycle ◽  
The Impact

The purpose of this study is to examine the impact of working capital management (WCM) and working capital strategy (WCS) on firm’s financial performance across different stages of the corporate life cycle (CLC). We use Pakistani non-financial listed firms nested in 12 diverse industries over a period of 2005–2014 as the research sample and employ the hierarchical linear mixed (HLM) estimator, which can process multilevel data where observations are not completely independent. The empirical findings reveal that, overall, WCM is negatively associated with firm performance. However, this association is not static across different stages of a firm’s life cycle. For example, a negative association is more pronounced at the introduction stage followed by growth and decline stages, whereas WCM does not significantly impact the performance of mature firms. Likewise, WCS also causes varying effects on the financial performance across the CLC. A conservative strategy at the introduction, growth, and decline stages negatively affects firm performance, suggesting that these firms should adopt an aggressive strategy. Nevertheless, management of sample firms did not account for the respective life cycle stage while formulating a WCM strategy, which can seriously compromise their financial sustainability. These findings suggest that firms require customized WCM policies and WCS to attain sustainable financial performance at each stage of firm life cycle. Thus, managers should not overlook the significant role of CLC stages in their financial planning to ensure the sustainable functioning of the enterprise.

scholarly journals Corporate Social Responsibility, Corporate Life Cycle, and Dividend Policy

2020 ◽  
Vol 27 (2) ◽  
pp. 101
Author(s):  
Eman Abdel-Wanis
Keyword(s):  
Corporate Social Responsibility ◽  
Life Cycle ◽  
Social Responsibility ◽  
Growth Stage ◽  
Dividend Policy ◽  
Business Environment ◽  
Life Cycles ◽  
Corporate Life Cycle ◽  
Corporate Social ◽  
The Impact

The aim of this paper is to investigate the impact of corporate social responsibility(CSR) on dividend policy through corporate life cycle (CLC) as a mediator using pathanalysis for 308 firms-observation for 80 non-financial firms during the period from 2014to 2017 using smart PLS (partial least square). This paper explores the impact of the socialresponsibility on the dividends policy and explores the role of each life cycle in this effecton dividends. The results show that firms in their growth stage are positively associatedwith CSR, while firms in stage of decline are less likely to invest in CSR. High CSR firmsmay use dividend policy to reduce the agency problems related to overinvestment in CSR.Results refer to corporate life cycle isn't influenced by dividends. The results show thatcorporate life cycles play an important role in enhance the relationship CSR and dividendpolicy especially in the growth stage in in the Egyptian business environment

The Impact of SOX Section 404 Internal Control Quality Assessment on Audit Delay in the SOX Era

2006 ◽  
Vol 25 (2) ◽  
pp. 1-23 ◽  
Author(s):  
Michael L. Ettredge ◽  
Chan Li ◽  
Lili Sun
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Small Sample ◽  
Impact Factors ◽  
Section 404 ◽  
Material Weakness ◽  
Control Quality ◽  
Sarbanes Oxley ◽  
Specific Material ◽  
The Impact

This study analyzes the impact of internal control quality on audit delay following the implementation of the Sarbanes-Oxley Act (2002) (SOX). Unlike prior studies of audit delay that obtain information about internal control strength via surveys, or use fairly crude proxies for internal control quality, our study employs external auditor assessments of internal control over financial reporting (ICOFR) that are publicly disclosed in SEC 10-K filings under SOX Section 404. Thus, the empirical evidence provided in this study is both timely and reliable (i.e., not subject to small sample bias or weak proxies). Consistent with our expectation, we find that the presence of material weakness in ICOFR is associated with longer delays. The types of material weakness also matter. Compared to specific material weakness, general material weakness is associated with longer delays. Additional analyses indicate that companies with control problems in personnel, process and procedure, segregation of duties, and closing process experience longer delays. After controlling for other impact factors, this study also documents a significant increase in audit delay associated with the fulfillment of the SOX Section 404 ICOFR assessment requirement. This suggests that Section 404 assessments have made it more difficult for firms to comply with the SEC's desire to shorten 10-K filing deadlines. Our finding thus supports and helps explain the SEC's decisions in 2004 and 2005 to defer scheduled reductions in 10-K filing deadlines (from 75 days to 60 days) for large, accelerated filers.

Corporate life cycle, CSR, and dividend policy: empirical evidence of Indonesian listed firms

2018 ◽  
Vol 16 (2) ◽  
pp. 159-178 ◽  
Author(s):  
Febi Trihermanto ◽  
Yunieta Anny Nainggolan
Keyword(s):  
Life Cycle ◽  
Business Strategy ◽  
Charitable Giving ◽  
Dividend Policy ◽  
Maturity Stage ◽  
Socially Responsible ◽  
Bottom Line ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Life Cycle

Purpose This paper aims to examine the association between corporate social responsibility (CSR) and corporate life cycle as well as dividend policy in Indonesia. Design/methodology/approach The paper develops two hypotheses that are tested empirically through multivariate settings. The tests are conducted using a sample of 527 Indonesian listed firms and 923 Indonesian firm-year observations between 2008 and 2015. Findings The findings support the hypothesis that CSR expenses increase when firms enter the maturity stage of their life cycle. On the triple bottom line components of CSR, firms which invest on CSR economic are in their maturity stage of their life cycle. The evidence also suggests that firms’ social donation and charitable giving increase as firms become mature. Furthermore, the strong evidence supports the hypothesis that firms’ CSR expenses positively affect dividend policy. This finding is robust to the alternative measurement of dividend payout, additional firms’ characteristics and instrumental variable to address endogeneity. Practical implications For investors in Indonesian listed firms, it is more profitable to invest in socially responsible firms than socially irresponsible firms. For firms, the results imply that spending in CSR does not reduce performance, thus becoming attractive for investors. Originality/value To the best of the authors’ knowledge, there is thin literature investigating the relation between corporate life cycle, CSR, and dividend policy in emerging markets while it is important as it could encourage companies to integrate CSR into their business strategy and transparently disclose their CSR activities. Further, as previous research on these topics mainly conducted using the US data (Rakotomavo, 2012; Benlemlih, 2014; Hasan and Habib, 2017), which most of CSR disclosures are voluntary, this paper contributes to the existing literature by examining these topics in a country where CSR is mandatory by the law.

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