Internal Control Weakness and Cost of Equity: Evidence from SOX Section 404 Disclosures
研究首次提交SOX第404条报告的公司中，内部控制缺陷与权益资本成本的关系，发现缺陷公司隐含权益成本更高，但控制基本特征和分析师预测偏差后，该关联消失。
We examine the association between cost of equity and internal control weakness (ICW) for firms that filed first-time Section 404 reports with the SEC. Using several proxies, we find higher implied cost of equity associated with ICW firms than for a control sample of firms that disclosed no ICW. However, the higher cost of equity associated with ICW disappears after controlling for primitive firm characteristics and for analyst forecast bias. Overall, we find that, on average, ICWs are not directly associated with higher cost of equity.