Board Level Co-Determination and Aggressive Reporting: Do Employees on the Board Influence Tax Aggressiveness and Earnings Management

Chyz, James A.; Eulerich, Marc; Fligge, Benjamin; Romney, Miles A.

doi:10.2139/ssrn.3441342

Cited by 2 publications

(3 citation statements)

References 82 publications

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“…Furthermore, there are two studies investigating the influence of codetermination on earnings management (Claassen, 2016;Eulerich & Fligge, 2019). While the paper by Claassen (2016) approximates the effects of codetermination by comparing parity with one third of codetermination on the supervisory board, Eulerich and Fligge (2019) use the codetermination index by Scholz and Vitols (2019). Contrary to our results, both papers find that codetermination on the supervisory board is negatively associated with earnings management.…”

Section: Related Literaturecontrasting

confidence: 93%

Codetermination on the Audit Committee: An Analysis of Potential Effects on Audit Quality

Hillebrandt

Ratzinger‐Sakel

2019

SSRN Journal

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Section: Related Literaturecontrasting

confidence: 93%

Codetermination on the Audit Committee: An Analysis of Potential Effects on Audit Quality

Hillebrandt

Ratzinger‐Sakel

2019

SSRN Journal

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“…Furthermore, there are two studies investigating the influence of codetermination on earnings management (Claassen, 2016; Eulerich & Fligge, 2019). While the paper by Claassen (2016) approximates the effects of codetermination by comparing parity with one third of codetermination on the supervisory board, Eulerich and Fligge (2019) use the codetermination index by Scholz and Vitols (2019). Contrary to our results, both papers find that codetermination on the supervisory board is negatively associated with earnings management.…”

Section: Related Literaturementioning

confidence: 99%

“…In addition, employee representatives may be able to increase employee acceptance of management decisions (Bermig & Frick, 2011) and, thus, reduce employee reluctance, which might have a positive impact on companies' productivity. Furthermore, there are two studies investigating the influence of codetermination on earnings management (Claassen, 2016;Eulerich & Fligge, 2019). While the paper by Claassen (2016) approximates the effects of codetermination by comparing parity with one third of codetermination on the supervisory board, Eulerich and Fligge (2019) use the codetermination index by Scholz and Vitols (2019).…”

Section: Related Literaturementioning

confidence: 99%

Codetermination on the audit committee: An analysis of potential effects on audit quality

Hillebrandt¹,

Ratzinger‐Sakel²

2021

Int J Auditing

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This paper empirically investigates the association between codetermination on the audit committee (AC) and audit quality. Using a sample of 655 firm‐year observations related to German CDAX companies, our results indicate that the presence of employee representatives on the AC is negatively associated with audit quality. This negative association can also be observed for the percentage of employee representatives serving on the AC. However, our analyses show that the mentioned findings turn insignificant when employee representatives have accounting expertise. In addition, the type of employee representatives seems to influence audit quality differently: our findings turn insignificant for employee representatives who are classified as company outsiders and, thus, expected to be more independent. These findings highlight the importance of accounting expertise and independence for AC members' monitoring effectiveness. To the best of our knowledge, this study is the first that analyses the impact of codetermination on the AC on audit quality.

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Board Level Co-Determination and Aggressive Reporting: Do Employees on the Board Influence Tax Aggressiveness and Earnings Management

Cited by 2 publications

References 82 publications

Codetermination on the Audit Committee: An Analysis of Potential Effects on Audit Quality

Codetermination on the Audit Committee: An Analysis of Potential Effects on Audit Quality

Codetermination on the audit committee: An analysis of potential effects on audit quality

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