내부회계관리제도의 취약점: 미래이익의 정보성과 투자자별 매매행태

This study examines whether the review results of internal control affect information effect of future earnings. This paper also investigates whether there are differences in trading behavior among investors depending on the review result. If firms report weaknesses in internal control, the reliability of the financial information provided by these firms will be low and investors will have difficulty in predicting future performance. Therefore, a company with a weakness will have a low relationship between stock returns and future earnings. When investors are divided into individual and professional investors, professional investors are likely to recognize the risk of weakness and sell them. But individual investors do not recognize them and trade on the basis of the earnings figures themselves with errors involved. Therefore, the differences in the trading behavior between them will be more pronounced for firms reporting weakness. This study uses 7,310 firm-year observations. Stock price informativeness of future earnings was measured as FERC. The major findings are as follows. First, FERCs are lower for firms reporting weakness, suggesting that it is difficult for investors to predict the future performance of the company reporting weakness. Second, FERCs are lower when weakness is related to accounting specific or material limitation of review work. However, weakness related to company level is not related to FERC. Third, the difference in net trading volume between individual and professional investors is greater for firms reporting weakness. And these results are evident when weakness is related to accounting specific or material limitation of review work.