ICFR Challenges and Practices at Large US Public Companies: Evidence from Accounting Executives
2020
We report insights about ICFR-related challenges and practices at large U.S. public companies from survey responses of 145 accounting executives and interviews of 16 accounting executives. Executives view controls around non-routine transactions, income tax provisions, and access to data as particularly challenging and report that ICFR challenges increase after corporate restructuring events. Executives are satisfied with existing ICFR guidance because it allows judgment but expressed interest in additional guidance in the form of real-life, industry-specific ICFR examples to counter what they perceive as the PCAOB’s standard-setting via auditors. Executives report relying on their auditors for ICFR insights and vetting ICFR judgments but are frustrated with auditors’ excessive ICFR documentation requirements that executives attribute to the PCAOB. Lastly, executives report lagging in implementation of ICFR technologies for lack of qualified personnel and concerns that such technologies could actually increase some risks. We discuss additional insights and suggest avenues for future research.
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