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The Role of Internal Controls in Reducing Cybersecurity Contagion Effects

Andrea Seaton Kelton & Ya‐wen Yang

Current Issues in Auditing2025https://doi.org/10.2308/ciia-2024-036article
AJG 2ABDC B
Weight
0.37

Abstract

SUMMARY This article summarizes a study by Kelton and Yang (2024), who investigate cybersecurity breach contagion effects where nonbreached (bystander) firms experience negative share price responses to a disclosed cybersecurity breach at an industry peer firm. The study finds bystander firms reporting an accounting loss in the previous year are more susceptible to contagion effects than bystander firms reporting a profit. Importantly, the study shows internal control quality provides protection from contagion effects, particularly for loss firms. The findings are useful for auditors as they show the expanding importance of reporting on firms’ internal controls. Auditors and managers may also consider the results of this study when communicating the importance of internal controls beyond financial reporting and exploring ways to mitigate cybersecurity risk.

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https://doi.org/https://doi.org/10.2308/ciia-2024-036

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@article{andrea2025,
  title        = {{The Role of Internal Controls in Reducing Cybersecurity Contagion Effects}},
  author       = {Andrea Seaton Kelton & Ya‐wen Yang},
  journal      = {Current Issues in Auditing},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2308/ciia-2024-036},
}

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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