Audit committees’ social capital and financial reporting quality

Carrera, Nieves; Sohail, Tashfeen; Carmona, Salvador

doi:10.1080/00014788.2017.1299617

Cited by 43 publications

(53 citation statements)

References 97 publications

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“…Th us, the participation of independent board members produces improvements in earnings quality, thus reducing information asymmetry (Goh, Ng & Young, 2012). It is observed that research on board of director independence has evolved and that this independence contributes to reducing agency problems, improving corporate governance practices (Carrera, 2013) and creating shareholder value (Hoitash, 2011).…”

Section: Board Of Director Interlockingmentioning

confidence: 99%

“…Th ey used panel data regression, identifying relationship networks based on degree centrality, intermediation, and proximity. Carrera (2013) Mindzak (2013) analyzed the formation of board interlocking and earnings management in Canadian companies. Aft er analyzing 120 medium-sized companies, he was able to affi rm that the interlinked companies presented less earnings management than the noninterlinked companies; that is, when interlinked, board members have a positive eff ect on earnings quality and long term company performance.…”

Section: Board Of Director Interlockingmentioning

confidence: 99%

“…In the context of North American companies there are the studies from Carrera (2013) and Chiu et al, (2013). Mindzak (2013) conducted a study on Canadian companies and Shi et al (2013) verifi ed the relationship between interlocking boards of directors and audit committees in the North American setting.…”

Section: Introductionmentioning

confidence: 99%

“…Studies demonstrate a connection between earnings management practices and interconnections between board members (Carrera, 2013;Chiu et al, 2013;Mindzak, 2013;Shi et al, 2013). In the context of North American companies there are the studies from Carrera (2013) and Chiu et al, (2013).…”

Section: Introductionmentioning

confidence: 99%

“…Researching the interlocking of audit committees and boards of directors, Carrera (2013) affi rms that studies such as these also provide insights based on Agency Th eory; that is, the participation of a director on more than one board means that he/she does not have the time and resources necessary to eff ectively monitor an organization's objectives.…”

Section: Introductionmentioning

confidence: 99%

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Influence of board interlocking on earnings management

Cunha

Piccoli

2017

Rev. contab. finanç.

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The participation of directors on more than one board is called "board interlocking". This phenomenon contributes to the spread of management and governance practices, through directors sharing their knowledge and experiences on other boards. Thus, directors could "carry" the earnings management practices present in one company into another in which they sit on the board. It is assumed that the greater directors' direct or indirect connections on boards, the greater the sharing of information, especially information that can be reflected in company earnings quality. In light of the above, the aim of this study is to verify the influence of board interlocking on earnings management in companies listed on the São Paulo Stock, Commodities, and Futures Exchange (BM&FBovespa). The study is characterized as descriptive, quantitative, and documentary, and uses a sample of companies listed on the BM&FBOVESPA between 2011 and 2013. For earnings management, the model from Kang and Sivaramakrishnan (1995) was used, while for interlocking, degree centrality measures were used for direct board member connections, and intermediation centrality for indirect connections. The results indicate that earnings management is influenced by the interlocking of board members. It is concluded that the greater the degree centrality, the greater positive earnings management is, and that variations in positive and negative accruals are influenced by board member intermediation. The results reinforce the idea that earnings management behavior can be transferred between companies by the directors that make up their boards.

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Section: Board Of Director Interlockingmentioning

confidence: 99%

Section: Board Of Director Interlockingmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Influence of board interlocking on earnings management

Cunha

Piccoli

2017

Rev. contab. finanç.

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Disclosure quality vis-à-vis disclosure quantity: Does audit committee matter in Omani financial institutions?

Lawati

Hussainey

Sagitova

2021

Rev Quant Finan Acc

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We examine the impact of audit committee (AC) characteristics (e.g. AC foreign members, AC female members, AC members with multiple directorships, AC members with share ownership and AC with financial and supervisory expertise) on forward-looking disclosure (FLD) quality and quantity. Using a sample of Omani financial companies listed on Muscat Securities Market over a five-year period (2014–2018), we find that a number of AC characteristics (such as AC size, AC female members and AC with multiple directorships) improve FLD quality. We make no such observation for FLD quantity. The results suggest that the responsibility of AC extends to improving the quality of FLD. We provide an additional analysis on the impact of AC effectiveness (ACE) on FLD quality, which suggests that companies’ compliance with CG code is beneficial for disclosure quality. We also find that the impact of ACE on FLD quality is influenced by corporate performance, leverage and the quality of external auditors. Our findings carry implications for the regulatory bodies’ efforts in encouraging companies to improve disclosure quality by considering AC characteristics as well as appointing more effective AC directors.

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