When to quit reading…

Long (2021) studied “the relationship between internal control weaknesses and lower profitability” (p. ii). Sounds straight forward to me. Internal control weaknesses could be interval and represent the count of weaknesses, and profitability would be measured by the firm reporting. Count data normally follows a Poisson distribution, but perhaps it could be transformed. Profit data can be normalized through log transformation. A correlation test or regression could be performed.

Stop Sign Stock Photo, Picture And Royalty Free Image. Image 8623324.

The emerging researcher explains later (pp. 2-5), that the focus is on Internal Control Weakness factors (whatever that is), that reduce the Return on Net Operating Assets (RNOA) post-merger and acquisition. It appears this type of research was recommended by two accounting academics. Good thing there is an IT professional to perform this study!

To perform the analysis, Mergers and Acquisition (M&A) and Internal Control Weakness (ICW) were dichotomizied (0 = No; 1 Yes). Companies were divided into four groups: Group 1 (M&A = No; ICW = No); Group 2 (M&A = No, ICW = Yes); Group 3 (M&A = Yes; ICW = No); and Group 4 (M&A = Yes, ICW = Yes). Then, the emerging scholar explains that three types of tests will be performed –

  • Paired Sample t-test (RNOA as DV)
  • Correlation
  • Multiple Regression

First, a paired-sample t-test is used to evaluate variables at different points in time. What the student should have performed is a two-sample t-test where between group differences are evaluated. Who reviewed this study? It doesn’t matter, no statistical differences were found. Could that be caused by the wrong test? Maybe. Could it be caused by sample size (An N = 119 was determined [p. 63], but only 38 companies were listed on pp. 83-85), or significant differences in sample sizes between groups? Also, maybe. The reason I answer maybe is that the emerging scholar failed to report descriptive statistics for the study. No Group n. Just the Group M. Regardless, was it the wrong test? Absolutely! But, I’m still scratching my head about why do this test when it wasn’t the focus of the study. I speculate the emerging scholar “mimiced” another study without understanding what was going on, or was advised by faculty to do this.

Second, the emerging scholar performed regression analysis using Cash Flow and Board Size as IVs and RNOA as the DV. Nothing was significant. Finally, the emerging scholar performed two regression analyses using an unknown value related to Groups 1 and 3 and an unknown value related to Groups 2 and 4 as IVs, and (a) RNOA and (b) Cash Flow as DVs. Again, nothing was significant; however, the emerging scholar did identify that the “Control Groups” (Groups 1 and 3) coefficient was significant (p = 0.011) in one model. Unfortunately, I don’t know how to interpret a B = -0.999 when the actual values are not described reported.

What’s funny is that a third regression analysis, using the same IVs, was performed. This time with Board Size as a DV. So, these two questionable IVs can predict board size? What does that have to do with the study? Plus, don’t get me started about the performance of tests of normality on categorical variables (see p. 77).

What happened here? I have no idea. I should have stopped reading at the paired samples t-test…


Long, L. G. (2021). The effects of internal control weaknesses that undermine acquisitions (Doctoral dissertation). ProQuest Dissertations & Theses Global: The Humanities and Social Sciences Collection. (28315391)