International Journal of Advanced Culture Technology

The International Promotion Agency of Culture Technology (국제문화기술진흥원)
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Human Resource Investment in Internal Control and Valuation Errors

  • Haeyoung Ryu (Department of Business Administration, Hansei Univ.)
  • Received : 2024.01.10
  • Accepted : 2024.03.05
  • Published : 2024.03.31
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Abstract

The purpose of an internal control system is to prevent the occurrence of errors and fraud in the process of producing accounting information, thereby providing investors with reliable information. For the effective operation of an internal control system, it is necessary to secure a sufficient number of personnel and experienced staff. This study focuses on the personnel directly involved in producing accounting information, examining whether companies that invest in their internal control staff experience a mitigation in the phenomenon of valuation errors. The analysis revealed that the size and experience months of the personnel responsible for internal control have a significant negative relationship with valuation errors. This result implies that by securing sufficient personnel for the smooth operation of the internal control system and placing experienced staff within the system, investors can effectively make judgments about the intrinsic value based on quality accounting information, thereby reducing valuation errors.

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Acknowledgement

This work was supported by Hansei University Research Fund of 2022.

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