EVALUATION OF THE RELATIONSHIP BETWEEN WEAKNESSES OF INTERNAL CONTROLS AND MANAGEMENT CHANGE

Abstract

Although weaknesses in internal accounting controls in both the public and private sectors have been addressed, financial statements alone do not meet management's informational needs, and the main objective of auditing cannot be considered to be assisting investors in making appropriate economic decisions. Therefore, the present study examines the relationship between weaknesses in internal controls and management change. This research is a quasi-experimental study and falls within the field of accounting and auditing. Data related to the research variables were collected using the “RahavardNovin” software and then organized using Excel 2013, where the research variables were calculated. For data analysis, EViews 8 and Stata 12 software were used. The study period is 5 years, from 2015 to 2019, and all companies listed on the Tehran Stock Exchange were examined. The results of the study indicate that the relationship between internal control weaknesses and management change is positive and significant. It can also be stated that internal control weaknesses have a significant relationship with management change on the Tehran Stock Exchange, and that internal control weaknesses are among the indicators of management change.