Abstract There is an abundance of literature examining the effects of a poor internal control system on financial reporting quality, decision-making and auditing. However, the most commonly used proxy for internal control quality (i.e., a material weakness in the internal controls over financial reporting) occurs relatively infrequently and has declined in occurrence over the past decade ( Chasan, 2013 ). In this study, we attempt to develop an alternative measure for internal control quality using the information reported in the S K portion of a firm's 10-K. We suggest that a misclassification of audit-related fees in the unaudited disclosures of the annual report is a proxy for low internal control quality. Consistent with lower internal control quality, we find that firms misclassifying audit-related fees are more likely to report a material weakness, are less timely filers (longer report lag) and pay higher audit fees. Our findings suggest that misclassification of audit-related fees correlate with having poor internal control quality.

中文翻译：

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审计相关费用分类错误，无法衡量内部控制质量

摘要有大量文献研究了不良内部控制系统对财务报告质量，决策和审计的影响。但是，最常用的内部控制质量指标（即财务报告内部控制中的实质性缺陷）发生的频率相对较低，并且在过去十年中下降了（Chasan，2013年）。在本研究中，我们尝试使用公司10-K的SK部分中报告的信息来开发内部控制质量的替代度量。我们建议在年度报告未经审计的披露中对与审计有关的费用进行错误分类，可以说明内部控制质量低下的原因。符合较低的内部控制质量，我们发现，错误归类与审计相关的费用的公司更有可能报告实质性缺陷，申报者的及时性较低（报告滞后时间较长），并支付较高的审计费用。我们的发现表明，与审计相关费用的错误分类与内部控制质量差有关。