The association between human resource investment in IT controls over financial reporting and investment efficiency

Dongjoon Choi, Hansol Lee, Ho Young Lee, Hyun Young Park

Research output: Contribution to journalArticlepeer-review

Abstract

This study investigates the association between human resource investment in information technology (IT) controls over financial reporting and its investment efficiency. To conduct the analysis, it uses novel hand-collected data on the number of IT control personnel. In particular, it uses the ratio of (1) the number of IT control personnel, (2) the number of IT control personnel who are certified public accountants to the total number of employees in a firm, and (3) the natural logarithm of average working experience of IT control personnel in months as a proxy for human resource investment in IT controls. This study finds that such investment is negatively associated with the firm's abnormal investment, suggesting that investing in IT control personnel enhances a firm's investment efficiency. Furthermore, not only quantitative but also qualitative investment in IT control personnel improves investment efficiency. We also find that the association between human resource investment in IT controls and a firm's investment efficiency is more pronounced for firms with lower financial reporting quality and information environment. The results of this study provide useful implications for management, regulators, and market participants, as they demonstrate the positive role of investment in IT control personnel on the firm's internal decision.

Original languageEnglish
Article number100534
JournalInternational Journal of Accounting Information Systems
Volume43
DOIs
Publication statusPublished - 2021 Dec

Bibliographical note

Funding Information:
This work was supported by the Korea Accounting Information Association.

Publisher Copyright:
© 2021 Elsevier Inc.

All Science Journal Classification (ASJC) codes

  • Management Information Systems
  • Accounting
  • Finance
  • Information Systems and Management

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