本研究主要探討，有報導內部控制嚴重缺失的公司，是否比沒有報導內部控制缺失的公司有更多的盈餘管理。本研究從AuditAnalytics及Compustat資料庫中收集2004年至2010年間至少揭露一次內部控制缺失之公司共1,371筆，加上無內部控制缺的公司6,468筆，總共7,839筆樣本公司，並使用由McVay(2006)提出並由Barua et al.(2010)修正的盈餘管理模型來進行回歸分析，實證結果發現有內部控制嚴重缺失的公司比沒有缺失的公司，有更多的分類轉移(Classification Shifting)盈餘管理。
除此之外，我們依COSO內部控制整合架構中五大要素的定義，將AuditAnalytics中21類內部控制缺失按COSO架構分類，並探討不同類型內部控制缺失與盈餘管理的影響。實證結果發現控制環境和財務報導相關之內部控制缺失和分類轉移盈餘管理有正向關係。本研究也發現內部控制缺失的數量和盈餘管理有顯著正向關係，以及自願揭露缺失之公司，比非自願揭露缺失之公司較無盈餘管理。但是我們的研究結果並未發現，由非四大查核的公司，比四大查核的公司有更多盈餘管理的證據。說明盈餘管理和是否由四大查核並無直接關係。

In this paper, we investigate whether firms reporting internal control material weaknesses have more classification shifting earnings management than other firms. Using the methodology developed in McVay (2006) and modified in Barua et al. (2010), we focus on 1,371 companies that disclosed at least one material weakness in the Audit Analytics database from 2004 to 2010, and other 6,468 firms without material weakness. We find evidence that there is more classification shifting for firms with internal control material weakness as compared to non-internal control material weakness firms.
Further, we examine the effects of different types of internal control material weaknesses on earnings management. We classify weaknesses using the Committee of Sponsoring Organization’s Internal Control-Integrated Framework (COSO 1992), and find that control environment and some material weaknesses related to financial reporting are more associated with classification shifting. We also find that material weakness firms with multiple numbers of weaknesses have more classification shifting than those with a single one and find that classification shifting is less associated with firms that voluntarily disclose material weaknesses. However, we do not find evidence that classification shifting is more severe for material weakness firms which are audited by non-Big 4 auditors than those audited by Big 4 auditors.

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