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Analyzing the Input-Process-Output Theory in Explaining the Impact of Boardroom Education on the Weaknesses of Internal Controls

    Authors

    • roohollah arab 1
    • Maryam Rezaei Monfared 2
    • mohammad gholamrezapoor 3
    • narjes amirnia 4

    1 Assistant Professor, Accounting Dept, Facility Member of Golestan Institute of Higher Education, Gorgan, Iran.

    2 PHD in Executive Management, Managment Dept, Facility Member of Golestan Institute of Higher Education, Gorgan, Iran.

    3 MA in Accounting

    4 MA in Auditing

,

Document Type : Research Paper

10.30479/jfak.2020.12909.2645
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Abstract

Objective: The Board of Directors is responsible for establishing effective and non-weak internal controls. On the other hand, according to the input-process-output theory, the level of education of board members is important and enhances the level of education of the board's effectiveness. Therefore, the level of education of the board of directors can be one of the factors influencing internal control. Therefore, the purpose of the present study was to investigate the effect of theboardeducation level on the of companies internal control weaknesses.
Methods: To test the research hypothesis, the financial information of listed companies in Tehran Stock Exchange between 2014 and 2018 was used, so that after applying the constraints in this study, a final sample of 96 companies was selected. After measuring the research variables, multivariate logistic regression analysis was used to test the research hypothesis. Hypothesis testing was also performed using Eviews econometric software and statistical data panel techniques.
Results: According to the prediction of input-process-output theory, the results show that there is a negative and significant relationship between the level of education of board members and the weakness of internal control of companies. In other words, the higher level of board education leads to the Decrease of the companies internal control weakness.
Conclusion: More educated executives in the board are more efficient and effective than their counterparts and perform better and improve the internal control of the company by exercising more control over the internal control of the company.
Contribution: The findings of the research can cover the research gap in board education and may be useful for managers, investors, and regulators of capital market decision making.
 

Keywords

  • Board Education Level
  • Internal Control Weaknesses
  • Input-Process-Output Theory
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Financial Accounting Knowledge
Volume 7, Issue 2 - Serial Number 25
September 2020
Pages 109-128
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  • Article View: 1,026
  • PDF Download: 670

APA

arab, R. , Rezaei Monfared, M. , gholamrezapoor, M. and amirnia, N. (2020). Analyzing the Input-Process-Output Theory in Explaining the Impact of Boardroom Education on the Weaknesses of Internal Controls. Financial Accounting Knowledge, 7(2), 109-128. doi: 10.30479/jfak.2020.12909.2645

MLA

arab, R. , , Rezaei Monfared, M. , , gholamrezapoor, M. , and amirnia, N. . "Analyzing the Input-Process-Output Theory in Explaining the Impact of Boardroom Education on the Weaknesses of Internal Controls", Financial Accounting Knowledge, 7, 2, 2020, 109-128. doi: 10.30479/jfak.2020.12909.2645

HARVARD

arab, R., Rezaei Monfared, M., gholamrezapoor, M., amirnia, N. (2020). 'Analyzing the Input-Process-Output Theory in Explaining the Impact of Boardroom Education on the Weaknesses of Internal Controls', Financial Accounting Knowledge, 7(2), pp. 109-128. doi: 10.30479/jfak.2020.12909.2645

CHICAGO

R. arab , M. Rezaei Monfared , M. gholamrezapoor and N. amirnia, "Analyzing the Input-Process-Output Theory in Explaining the Impact of Boardroom Education on the Weaknesses of Internal Controls," Financial Accounting Knowledge, 7 2 (2020): 109-128, doi: 10.30479/jfak.2020.12909.2645

VANCOUVER

arab, R., Rezaei Monfared, M., gholamrezapoor, M., amirnia, N. Analyzing the Input-Process-Output Theory in Explaining the Impact of Boardroom Education on the Weaknesses of Internal Controls. Financial Accounting Knowledge, 2020; 7(2): 109-128. doi: 10.30479/jfak.2020.12909.2645

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