However, Johnstone, Li, and Rupley (2011) show that many U.S. public companies disclose
persistent IC weaknesses. In the three years ending 2006, they found that 733 U.S. companies
disclosed a material weakness. By the end of year one, most (59 percent) had remedied the
weakness, consistent with market forces and litigation risk pressuring companies to eliminate such
weaknesses by incurring IC costs. Even after three years, nearly a third (30 percent) continued to
disclose the same IC weakness.