내부회계관리제도의 취약점과 주식수익률 및 수익률 변동성 = Material Weaknesses in the Internal Accounting Control System, Stock Return and Volatility of Stock Return

다국어 초록 (Multilingual Abstract)

Implementation of an Internal Accounting Control System(IACS) has become a mandatory requirement in Korea. Capital market participants can use IACS information of individual corporations to make better decision. Those information were hard to get in the past. This study investigates whether capital market participants are using IACS information to make economic decisions. In other words, this study searches whether firms with reported material weaknesses in IACS have more volatility of daily stock return and have lower stock returns in current year and next year. The result of this study provides evidences that volatility of daily stock return are higher and stock returns are lower for the firms which reported material weaknesses in IACS. Reporting a material weakness in IACS means that the possibility of the financial statements with fraud and error is increased. Therefore, the result of this study shows that capital market responds negatively to the firms` financial statements which reported material weaknesses in IACS.