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Understanding the Internal Controls database
Who is this article for?Users who want to learn about the Internal Controls database.
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1. General overview
- The Audit Analytics Internal Control database covers all SEC registrants who have disclosed their assessments of (SOX 404) and (SOX 404b) internal controls since November 2004.
- Each row represents either the data concerning the auditor’s attestation report or the management’s assessment of internal controls over financial reporting.
- Per SEC requirements this includes all ’33 & ’34 Act filers.
2. Common uses
- Gauging financial reporting quality.
- Finding ineffective internal controls by accounting rules (GAAP/FASB) failures.
- Identifying companies that list fraud as a control weakness.
- Understanding which internal controls companies have had the most difficult time establishing.
The Internal Controls database is available online, through WRDS, and through data feeds [Feed11] with the relevant subscription.
- Saved Search Alert: Yes
- Daily Summary Email: No
3. Collection methodology
- The internal control data set covers all SEC registrants who have disclosed their assessments of internal controls over financial reporting in electronic filings.
- This data is sourced from the following form types: 10-K, 10-K/A, 20-F and 40-F.
- Except for asset backed securities and registered investment companies, all SEC registrants are required to file management’s report on internal control over financial reporting.
- The effectiveness, areas of control that have material weaknesses, and/or areas of accounting affected by the weakness are determined.
4. Searching
The Internal Controls search page offers the following filters:
| Name | Description | Data Dictionary Field(s) | Sort By? |
|---|---|---|---|
| Filter by Auditor | Filter for a specific auditor or group of auditors | Auditor | Yes |
| Search by Ticker or CIK Code | Filter results to a specific population |
CIK Code Ticker |
Yes |
| Search by Keyword | Search for text containing keyword | N/A | No |
| Auditor’s Internal Control Report/Management’s Internal Control Report | Select whether to return the auditor’s IC reports or Management’s IC reports | Internal Control Report | No |
| Internal controls are effective | Filter for whether Internal Controls are effective | Effective Internal Controls | No |
| Market Index | Filter by principal exchange | Market | No |
| Internal Control Taxonomies | Select any or all internal controls taxonomies to include:
|
Refer to “Taxonomy of Issues” tab | No |
| Fiscal Year | Filter by calendar year ended for corresponding auditor fee information | Fiscal Year | No |
| Market Cap | Filter by a range of market capitalization as of stock price date | Market Cap ($) | Yes |
| Revenues | Filter by a range of past year’s total revenue | Revenue ($) | Yes |
| Company Location | Filter by current business address location(s) |
State Code State Name State Region County City |
Yes |
| Auditor Location | Filter by Auditor location |
Auditor City Auditor State Code Auditor State Name Auditor State Region |
Yes |
| Search Industries | Filter by companies’ industry(s) |
SIC Code NAICS Code |
No |
| Audit Fees | Filter by a range of companies’ reported audit fees | Audit Fees ($) | Yes |
| File Date | Filter by a range of date on which the filing was submitted to SEC | Source Date | Yes |
5. Results
- Results can be viewed at the bottom of the page.
- The following are accessible through clicking the respective hyperlinks:
- Internal Controls Data Dictionary download
- CSV file downloads of the results
- All fields available in the CSV are defined in the Data Dictionary
- Overview of individual companies’ profile
- Auditor profiles
- Filing type (opens the disclosure text for a given entry)
- All records of a given company are available for viewing on the company’s overview profile.
6. Additional information
- Material Weaknesses
- The number of material weaknesses in internal control assessments is counted by analysts, alongside taxonomies.
- If a standardised list is provided, we count the listed weaknesses; if not, we identify unique weaknesses in the text.
- The count of weaknesses may differ from the number of taxonomies, as one weakness can correspond to multiple taxonomies.
- Identifying material weaknesses:
- There’s no specific filter for material weaknesses; identification varies based on the information needed. Consider these methods:
- Access the Internal Controls database, select "no" for 'Internal controls are effective', and search.
- This yields results for companies with effective internal controls.
- You can filter by specific taxonomies.
- Filter “Internal Control – Number Weaknesses Identified” in the CSV download.
- Access the Internal Controls database, select "no" for 'Internal controls are effective', and search.
- There’s no specific filter for material weaknesses; identification varies based on the information needed. Consider these methods:
- The number of material weaknesses in internal control assessments is counted by analysts, alongside taxonomies.
- Internal Controls Taxonomies vs. Disclosure Controls Taxonomies:
- Internal Controls reference “fraud as a control weakness”, excluding clerical errors.
- Both types have three sections for accounting taxonomies, differing only in specificity.
- Internal Controls reference “fraud as a control weakness”, excluding clerical errors.