An Analysis of Multiple Consecutive Years of Material Weaknesses in Internal Control
研究了连续多年存在内部控制重大缺陷（未整改）对权益资本成本的影响，发现其显著提高成本，而部分整改则被市场视为利好，有助于调和已有研究的矛盾结论。
ABSTRACT The primary objective of the current study is to empirically reexamine the relation between material weaknesses in internal control (MW) and cost of equity (CE). We direct particular emphasis to the way non-remediation, as well as remediation, of MW affects a firm's CE. This study utilizes a dataset that contains a large sample of second-year MW non-remediation cases, as well as third-, fourth-, and fifth-year non-remediation cases. The findings provide evidence that reporting MW, absent any remediation, in multiple consecutive years has a significant negative impact on CE. However, the current study also shows that the market views favorably a reduction in the number of MW (i.e., partial remediation). Our study helps to reconcile conflicting results in the literature devoted to the relation between MW and CE. JEL Classifications: M41; M42. Data Availability: Available from sources identified within the article.