Melbourne Accounting Research Seminar - Chan Li

Chan Li from the University of Kansas will present a MARS seminar.

Topic:  Internal Control  Process and Employee Satisfaction

Abstract: This paper examines how deficiencies in the internal control process affect employee job satisfaction. Using a large sample of employee ratings from Glassdoor.com as proxies for mployee satisfaction, we find that lower-quality internal control is associated with more dissatisfied employees. Our results are more pronounced for firms with a greater percentage of employees who are racial minorities or women. We also provide some evidence of internal control deficiencies leading to higher rates of employees leaving the firm. We conduct various tests to address endogeneity and reverse causality concerns. In sum, we show that problems in the internal control process have significant impacts on employee satisfaction, and that these effects may be unequally distributed across different demographic groups.

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