Level of adherence with the COSO 2013 Internal Control Framework and the resulting impact on the profitability of non-SEC mexican public companies

Abstract

Although annual reports of companies listed in the US markets must disclose the internal control framework being applied, in which the COSO 2013 framework is the most used, Mexican regulations do not demand a similar requirement and much less its level of adherence. For this reason, this research was defined to identify the level of internal control perception by companies listed in the Mexican Stock Exchange and its impact on the variables operating efficiency and profitability. A Likert scale survey, based on the COSO 2013 framework, was applied to accounting and auditing personnel working in these companies. The effects on operating efficiency and profitability were analyzed with financial reports from 2010 to 2020. The quantile regression method was applied. The results indicate a significant impact of internal control perception with a negative coefficient, where a possible reason of this is the cost of implementing internal controls.