Social Capital and Internal Control Material Weaknesses
研究发现，总部位于美国社会资本较高县的上市公司，其财务报告内部控制出现无效的可能性更低，且这种负相关在外部监督较弱时更明显，主要由实体层面而非账户层面的重大缺陷驱动。
SYNOPSIS Using a measure of social capital provided by the Northeast Regional Center for Rural Development, we document that, after controlling for auditor effort, firms headquartered in U.S. counties with higher social capital are less likely to have ineffective internal control over financial reporting than those located in regions with lower social capital. This negative association between local social capital and ineffective internal controls holds when other forms of external monitoring are weak. We also find that the association is driven by ineffective internal control arising from entity-level, but not from account-specific, material weaknesses. Overall, we contribute to the literature that links firms' social environment with financial reporting quality. Data Availability: Data are available from public sources identified in the paper.