The impact of enterprise resource planning (ERP) systems on the effectiveness of internal controls over financial reporting

Journal of Information Systems

Volumn 25, Issue 1, 2011, Pages 129-157

  Morris, John J ^a  

^a KANSAS STATE UNIVERSITY   (United States)

Author keywords

Enterprise resource planning; ERP; Internal control; Sarbanes oxley; Section 404; SOX

Indexed keywords

EID: 79961141707     PISSN: 08887985     EISSN: 15587959     Source Type: Journal    
DOI: 10.2308/jis.2011.25.1.129     Document Type: Article

References (45)

1. Abdel-khalik, A. R. 1993. Why do private companies demand auditing? A case for organizational loss of control. Journal of Accounting, Auditing and Finance 8 (Winter): 31-52.
2. American Institute of Certified Public Accountants (AICPA). 2010. Section 404(b) of Sarbanes-Oxley Act of 2002. Available at: http://www.aicpa.org/advocacy/issues/pages/section404bofsox.aspx.
3. Ashbaugh-Skaife, H., D. W. Collins, and W. R. Kinney. 2007. The discovery and reporting of internal control deficiencies prior to SOX-mandated audits. Journal of Accounting and Economics 44(1): 166-192.
4. Ashbaugh-Skaife, H., D. W. Collins, W. R. Kinney and R. LaFond. 2008. The effect of SOX internal control deficiencies and their remediation on accrual quality. The Accounting Review 83(1): 217-250.
5. Ashbaugh-Skaife, H. 2009. The effect of SOX internal control deficiencies on firm risk and cost of equity. Journal of Accounting Research 47(1): 1-43.
6. Bagranoff, N. A., and V. P. Vendrzk. 2000. The changing role of IS audit among the big five US-based accounting firms. Information Systems and Control Journal 5: 33-37.
7. Barber, B. M., and J. D. Lyon. 1997. Detecting long-run abnormal stock returns: The empirical power and specification of test statistics. Journal of Financial Economics 43: 341-372.
8. Barefield, R. M., J. J. Gaver, and T. B. O'Keefe. 1993. Additional evidence on the economics of attest: Extending results from the audit market to the market for compilations and reviews. Auditing: A Journal of Practice & Theory 12(Spring): 74-87.
9. Brazel, J., and C. P. Agoglia. 2007. An examination of auditor planning judgments in a complex accounting information system environment. Contemporary Accounting Research 24(Winter): 1059-1083.
10. Brazel, J. and L. Dang. 2008. The effect of ERP system implementations on the management of earnings and earnings release dates. Journal of Information Systems 22(2): 1-21.
11. Brennan, N. M., and J. Soloman. 2008. Corporate governance, accountability and mechanisms of accountability: An overview. Accounting, Auditing & Accountability Journal 21(7): 885-906.
12. Brunelli, M. 2006. Smaller Vendors Challenge SAP, Oracle in ERP Market. Available at: http://searchoracle.techtarget.com/originalContent/0,289142,sid41_gci1229162,00.html.
13. Chan, K. C., B. R. Farrell, and P. Lee. 2008. Earnings management of firms reporting material interna lcontrol weaknesses under Section 404 of the Sarbanes-Oxley Act. Auditing: A Journal of Practice & Theory 27(2): 161-179.
14. Cheffers, M., D. Whalen, and M. Thrun. 2008. 404 Dashboard: Year 4 Update: Audit Analytics Database Report.
15. Committee of Sponsoring Organizations(COSO). 1985. Organization background information. Available at: http://www.coso.org/.
16. Committee of Sponsoring Organizations(COSO). 1992. Internal Control-Integrated Framework: Executive Summary. The Committee of Sponsoring Organizations of the Treadway Commission 1992. Available at: http://www.coso.org/icintegratedframework-summary.htm.
17. Davenport, T. H. 1998. Putting the Enterprise into the Enterprise System. Boston, MA: Harvard Business Review.
18. Deumes, R., and W. R. Knechel. 2008. Economic incentives for voluntary reporting on internal risk man agementand control systems. Auditing: A Journal of Practice & Theory 27(1): 35-66.
19. Dorantes, C. A., C. Li, G. F. Peters, and V. J. Richardson. 2009. The effect of enterprise systems implementations on the firm information environment. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id_1526521.
20. Doyle, J. T., W. Ge, and S. McVay. 2007. Determinants of weaknesses in internal control over financial reporting. Journal of Accounting and Economics 44(1/2): 193-223.
21. Eisenhardt, K. M. 1989. Agency theory: An assessment and review. Academy of Management Review 14(1): 57-74.
22. Eschinger, C. 2006. Market share: ERP software, worldwide, 2005(executive summary). In ID Number: G00141080, edited by Gartner. Stamford, CT: Gartner, Inc.
23. Ettredge, M. L., L. Sun, and C. Li. 2006. The impact of SOX Section 404 internal control quality assessment on audit delay in the SOX era. Auditing: A Journal of Practice & Theory 25(2): 1-23.
24. Ge, W., and S. McVay. 2005. The disclosure of material weaknesses in internal control after the Sarbanes-Oxley Act. Accounting Horizons 19(3): 137-158.
25. Grant, G. H., K. C. Miller, and F. Alali. 2008. The effect of IT controls on financial reporting. Managerial Auditing Journal 23(8): 803-823.
26. Gupta, P., and J. C. Thomson. 2006. Use of COSO 1992 in management reporting on internal control. Strategic Finance (September): 27-33.
27. Hayes, D. C., J. E. Hunton, and J. L. Reck. 2001. Market reaction to ERP implementation announcements. Journal of Information Systems 15(1): 3-18.
28. Hunton, J. E., A. M. Wright, and S. Wright. 2004. Are financial auditors overconfident in their ability to assess risks associated with enterprise resource planning systems? Journal of Information Systems 18(2): 7-28.
29. Janvrin, J. D., J. Bierstaker, and D. J. Lowe. 2004. The impact of client information technology on audit procedures. Working paper, Iowa State University.
30. Jensen, K. L., and J. L. Payne. 2003. Management trade-offs of internal control and external auditor expertise. Auditing: A Journal of Practice & Theory 22(2): 99-119.
31. Krishnan, J. 2005. Audit committee quality and internal control: An empirical analysis. The Accounting Review 80(2): 649-675.
32. Morris, J. J. 2009. Measuring the impact of enterprise resource planning(ERP) systems through the prism of accounting theory. Dissertation, Kent State University.
33. Nicolaou, A. I. 2004. Firm performance effects in relation to the implementation and use of enterprise resource planning systems. Journal of Information Systems 18(2): 79-105.
34. Ogneva, M., K. R. Subramanyam, and K. Raghunandan. 2007. Internal control weakness and cost of equity: Evidence from SOX Section 404 disclosures. The Accounting Review 82(5): 1255-1297.
35. Oracle. 2005. Information Generates Value: The Cornerstone for Sustainable Compliance and Growth 2005. Available at: http://www.oracle.com/applications/financials/finance.pdf.
36. Public Company Accounting Oversight Board(PCAOB). 2007. An Audit of Internal Control over Financial Reporting that is Integrated with An Audit of Financial Statements. Auditing Standard No. 5. Washington, D.C.: PCAOB.
37. Raghunandan, K., and D. V. Rama. 2006. SOX Section 404 material weakness disclosures and audit fees. Auditing: A Journal of Practice & Theory 25(1): 99-114.
38. Samson, W. D., D. L. Flesher, and G. J. Previts. 2006. Corporate governance and external and internal controls: The case of the Baltimore and Ohio Railroad, circa 1831. Issues in Accounting Education 21(1): 45-62.
39. SAP. 2005. Enterprise Governance and Sarbanes-Oxley Compliance with my SAP ERP Financials 2005. Available at: http://www.sap.com/usa/solutions/business-suite/erp/financials/pdf/entp_gov_so_compliance.pdf.
40. Securities and Exchange Commission (SEC). 2003. Final Rule: Management's Reports on Internal Control over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports. Edited by U.S. SaE Commission. Available at: http://www.sec.gov/rules/final/33-8238.htm.
41. U.S. SaE Commission. 2009. Internal Control over Financial Reporting in Exchange Act Period Reports of Non-Accelerated Filers. Edited by SEC: Release No. 33-9072, 14. Washington, D.C.: Government Printing Office.
42. Simmons, M. R. 1997. COSO based auditing. The Internal Auditor 54(6): 68-73.
43. Staggers, H. O. 1977. Unlawful Corporate Payments Act of 1977. Available at: http://www.justice.gov/criminal/fraud/fcpa/history/1977/houseprt-95-640.pdf.
44. U.S. Congress. 1998. Anti-Bribery and Books & Records Provisions of the Foreign Corrupt Practices Act (as amended November 10, 1998). Washington, D.C.: USDOJ.
45. Wright, S., and A. M. Wright. 2002. Information system assurance for enterprise resource planning systems: Unique risk considerations. Journal of Information Systems 16: 99-113.