{"title":"Information Technology Capability, Managerial Ability, and Financial Reporting Quality: A Research Note","authors":"Ann N. Mungai, Lorraine S. Lee","doi":"10.2308/isys-2022-063","DOIUrl":null,"url":null,"abstract":"\n The role of a firm’s information technology (IT) capability and managerial ability on financial reporting quality has been documented in prior literature. However, scant empirical work exists on the moderating effect of managerial ability on a firm’s IT capability and its impact on financial reporting quality. Drawing on the resource-based view of the firm and a sample of firms from 2000 to 2013, we predict and find that InformationWeek 500 (IW500) firms with high-ability managers are associated with better financial reporting quality than non-IW500 firms. Specifically, we find that IW500 firms have better financial reporting quality and are less likely to restate their financial statements in subsequent periods and the interaction of IT capability and managerial ability improves financial reporting quality. Our findings document the importance of IT and the moderating effect of managerial ability on IT in influencing financial reporting quality.\n Data Availability: Data are available from the public sources cited in the text.\n JEL Classifications: M40.","PeriodicalId":46998,"journal":{"name":"Journal of Information Systems","volume":null,"pages":null},"PeriodicalIF":2.0000,"publicationDate":"2024-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Information Systems","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.2308/isys-2022-063","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
The role of a firm’s information technology (IT) capability and managerial ability on financial reporting quality has been documented in prior literature. However, scant empirical work exists on the moderating effect of managerial ability on a firm’s IT capability and its impact on financial reporting quality. Drawing on the resource-based view of the firm and a sample of firms from 2000 to 2013, we predict and find that InformationWeek 500 (IW500) firms with high-ability managers are associated with better financial reporting quality than non-IW500 firms. Specifically, we find that IW500 firms have better financial reporting quality and are less likely to restate their financial statements in subsequent periods and the interaction of IT capability and managerial ability improves financial reporting quality. Our findings document the importance of IT and the moderating effect of managerial ability on IT in influencing financial reporting quality.
Data Availability: Data are available from the public sources cited in the text.
JEL Classifications: M40.
期刊介绍:
The Journal of Information Systems (JIS) is the academic journal of the Accounting Information Systems (AIS) Section of the American Accounting Association. Its goal is to support, promote, and advance Accounting Information Systems knowledge. The primary criterion for publication in JIS is contribution to the accounting information systems (AIS), accounting and auditing domains by the application or understanding of information technology theory and practice. AIS research draws upon and is informed by research and practice in management information systems, computer science, accounting, auditing as well as cognate disciplines including philosophy, psychology, and management science. JIS welcomes research that employs a wide variety of research methods including qualitative, field study, case study, behavioral, experimental, archival, analytical and markets-based.