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Journal of Forensic & Investigative Accounting Volume 8: Issue 1, January–June, 2016 49 Free Cash Flow and Debt Monitoring Hypotheses: Evidence from Material Internal Control Weakness Disclosure Sheela Thiruvadi Hua-Wei Huang Clark M. Wheatley Shiyaamsundar Thiruvadi* I. Introduction In this study, we investigate whether auditors are more conservative with regard to firms with high free cash flows (FCF) by examining the association between FCF level and reported internal control weakness (ICW). This study is motivated by the recent concerns of regulators, academicians, and the public regarding internal control issues (PCAOB 2006, PCAOB 2012, Rice and Weber 2012, Rice, Weber, and Wu 2014). Since the financial scandals of Enron and WorldCom occurred, much attention has been focused on the issue of corporate governance, which can help in enhancing the reporting quality of financial statements. Specifically, the failure of Enron and WorldCom was the result of a large number of weaknesses i...