Board Characteristics, Audit Committee Characteristics and Abnormal Accruals

Bradbury, Michael E.; Mak, Yuen Teen; Tan, SheeMon

doi:10.2139/ssrn.535764

Cited by 129 publications

(195 citation statements)

References 39 publications

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“…Therefore, Board independence seeks fairness in the strategic decisions taken by the Board and effective monitoring of the decisions and activities of managers, thus ensuring transparency of information and proper image on the outside of organizations (Chen and Jaggi 2000;Patelli and Prencipe 2007). Furthermore, several studies provide empirical evidence relating to the role of external directors on the constriction of EM, documenting that a higher proportion of external directors, will mean greater and better quality of financial information issued by firms, so reducing the chances of EM (Xie et al 2003;Davidson et al 2005; García Osma and Gill de Albornoz 2007; Bradbury et al 2006;Jaggi et al 2009). …”

Section: Board Independencementioning

confidence: 99%

Does Corporate Governance Influence Earnings Management in Latin American Markets?

2013

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Although US and European research has documented improvement in earnings quality associated with corporate governance characteristics, the situation in Latin America is questionable, given the business environment in which firms operate, which is characterized by controlling family ownership and weak legal protection. The purpose of this study is to examine the relation between the internal mechanisms of Corporate Governance and Earnings Management measured by discretionary accrual. We use a sample of listed Latin American non-financial companies from the period 2006-2009. Our results show how in the Latin American context the role of external directors is limited and that Boards which meet more frequently take a more active position in the monitoring of insiders, so showing a lower use of manipulative practices. In addition, we find a non-linear relation between insider ownership and discretionary accruals, also pointing to the fact that ownership concentration may be a manipulative practices constrictor mechanism only when the ownership of main shareholders is moderate. The findings have important policy implications since this is, to the best of our knowledge, the first study to analyze the relation between the effectiveness of the government and the earnings management behavior. As policy implications, we document how when a country implements controls aimed at reducing corruption, strengthening the rule of law or improving the effectiveness of government, this leads to a reduction in firm earnings management.

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Section: Board Independencementioning

confidence: 99%

Does Corporate Governance Influence Earnings Management in Latin American Markets?

2013

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“…Several theoretical and empirical studies have addressed this issue such as the study of Jensen (1993) A large boards may contain mechanisms for entrenchment (Yermack (1996), Pichard-Stamford (1998) and Godard (2001) Bradbury et al (2004)). Indeed, a large board has a negative impact on its performance.…”

Section: Characteristics Of the Boardmentioning

confidence: 99%

Corporate Governance System and Quality of Financial Information

Jouini

2013

MJSS

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“…Authors such as Anderson and Bizjak (2003), Bradbury et al (2006), Brick and Chidambaran (2010), Klein (2002) and Zhang et al (2007) examine the importance of the audit and/or remuneration committees for various firm activities. NZX Listing Rules 3.6.1 and 3.6.2 require NZ firms listed on the main board to have an audit committee containing a majority of independent directors.…”

Section: Board Committeesmentioning

confidence: 99%

New Zealand Corporate Boards in Transition: Composition, Activity and Incentives between 1995 and 2010

Boyle

Ji²

2012

SSRN Journal

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We document, describe and interpret changes in New Zealand corporate board characteristics between 1995 and 2010, a period centred around the 2003 introduction of the NZX Corporate Governance Best Practice Code. Unsurprisingly, the representation of non-executive, independent and female directors on NZ boards rose during the period, as did real chair and director fees and the importance of board committees, while average board size fell. Perhaps more surprisingly, much of this movement occurred before 2003. However, the magnitude of these changes frequently varies according to firm size, and there are some intriguing differences between New Zealand board characteristics and those prevailing in other, larger, countries. We use this information to identify a number of unanswered questions about New Zealand corporate boards.JEL classification: G34, G38

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Board Characteristics, Audit Committee Characteristics and Abnormal Accruals

Cited by 129 publications

References 39 publications

Does Corporate Governance Influence Earnings Management in Latin American Markets?

Does Corporate Governance Influence Earnings Management in Latin American Markets?

Corporate Governance System and Quality of Financial Information

New Zealand Corporate Boards in Transition: Composition, Activity and Incentives between 1995 and 2010

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