The Relationships between Internal Control Weakness, Corporate Social Responsibility and Financial Distress

• Main Authors: CHEN,HSIU-CHING, 陳秀卿
• Other Authors: HUNG,YU-SHUN
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/27722926904638142845

碩士 === 輔仁大學 === 會計學系碩士班 === 104 === In recent years major internal fraud incidents have astonished the world, including Enron Corporation, WorldCom Group, Donglong Hardware, PROCOMP Informatics Ltd., and Rebar that lead to social anxiety and huge losses in public investors, and in some cases corporate closures or management crisis. These frauds not only highlight severe losses caused by internal control weakness but emphasize more on the imprudence of corporate owners, neglecting the importance of corporate integrity management and social responsibilities. For this reason, the study analyzes the association between the internal control weakness, corporate social responsibility and financial crisis in domestic listed (OTC) companies in Taiwan. The study objects comprise the listed (OTC) companies between 2005-2015 and applies the sanction cases announced on the website of Securities and Futures Bureau, Financial Supervisory Commission, the corporate social responsibility reports announced on the CSRone Sustainability Report Platform and the financial crisis incident database from Taiwan Economic Journal as the proxy variables for internal control weakness, corporate social responsibility and financial crisis. Empirical results show that companies with internal control weakness have significant positive correlation for financial crisis, compared to companies without internal control weakness.Companies publishing CSR reports tend to have significant positive significance in the likelihood of financial crisis, compared to companies without publishing CSR reports.The feasibility test for internal control weakness and publication of CSR reports suggests that there is no significant correlation between internal control weakness and the publication of CSR reports.