Internal control material weaknesses and foreign corrupt practices act violations

Yi-Hung Lin, Meghann A. Cefaratti , Chih-Chen Lee , Hua-Wei Huang

Research output: Contribution to journalArticleResearchpeer-review


The purpose of this research is to investigate the relationship between internal control material weaknesses (ICMWs), as measured by presence, number, and type, and Foreign Corrupt Practices Act (FCPA) violations. Our results indicate that firms with ICMWs are more likely to violate the FCPA and firms with multiple ICMWs have a higher likelihood of violating the FCPA than firms with fewer ICMWs. Further, firms with ICMWs related to the risk assessment, control environment, and control activities components of internal controls (based on the COSO Internal Control—Integrated Framework) present a higher risk of FCPA violations than firms without ICMWs in those areas. These findings substantiate the importance of effective internal controls in supporting firms' regulatory compliance.
Original languageEnglish
Pages (from-to)A80-A104
Number of pages25
JournalJournal of Forensic Accounting Research
Issue number1
Publication statusPublished - 2018


  • internal control material weakness
  • internal controls

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