Political Connections, SEC Enforcement and Accounting Quality

Correia, Maria

doi:10.2139/ssrn.1465783

Cited by 48 publications

(34 citation statements)

References 33 publications

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“…41 Since the rule-making processes of the FASB and the SEC are open to public observation and participation, the FASB and the SEC are subject to significant pressure from various political constituents (e.g., Watts and Zimmerman, 1978;Sunder, 1988). Empirical evidence suggests that accounting standards and regulation (including their enforcement) are in fact subject to political pressure (Ramanna, 2008;Correira, 2009;Hochberg et al, 2009). A broad literature in economics and finance has examined the effect of (political) institutions on the development of economic systems and financial markets.…”

Section: Models Of Disclosure Regulationmentioning

confidence: 99%

The financial reporting environment: Review of the recent literature

Beyer

Cohen

Lys

et al. 2010

Journal of Accounting and Economics

1,914

328

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Section: Models Of Disclosure Regulationmentioning

confidence: 99%

The financial reporting environment: Review of the recent literature

Beyer

Cohen

Lys

et al. 2010

Journal of Accounting and Economics

1,914

328

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“…7 7 Correia (2010) refers to AR as the ‘Accounting Score’ and notes that AR is derived solely from financial statement information. Personal discussions with Audit Integrity personnel confirm that there are no geographically‐based components to accounting risk.…”

mentioning

confidence: 99%

Religious Social Norms and Corporate Financial Reporting

Dyreng

Mayew

Williams

2012

Business Fin & Account

417

389

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Religion has been shown to influence economic choices and outcomes in a variety of contexts. Honesty and risk aversion are two social norms forwarded to characterize the religious. Using the level of religious adherence in the county of a US firm's headquarters as a proxy for these religious social norms, we find that higher levels of religious adherence are associated with both a lower likelihood of financial restatement and less risk that financial statements are misrepresented because of overstated (understated) revenue/assets (expenses/liabilities). We also find that accruals of managers in areas of high religious adherence exhibit smaller deviations from expectations, and deviations, when they occur, tend to improve the time series mapping of accruals into cash flows. These results hold overall and separately for both Catholic and Protestant religious adherence. Further analysis reveals that the effects of religious social norms extend beyond accrual choices. We find that firms located in areas of high religious adherence are less likely to engage in tax sheltering, and are more forthcoming with bad news in their voluntary disclosures. Collectively, our results provide new evidence on the role of religion and social norms in corporate financial reporting.

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“…Duchin and Sosyura (2012) investigate application data for Troubled Asset Relief Program (TARP) funds and find that those firm applicants with political connections 3 are more likely to be funded. Correia (2012) finds that for firms with irregular accounting practices, those with political connections are less likely to become the target of Securities and…”

mentioning

confidence: 99%

“…This clearly indicates that political connection is a source of "corruption" and "inefficiency. "Correia (2012) presents evidence showing that firms use their political influence to avoid the scrutiny of the SEC or mitigate the punitive damage in the case of financial reporting irregularity Faccio et al (2006). analyze a unique dataset that covers 35 countries during 1997-2002 and find that those politically connected firms are far more likely to be bailed out during financial distress than non-connected firms in a similar economic crisis.…”

mentioning

confidence: 99%

Political Connections of the Boards of Directors and Defense Contractors Excessive Profits

Wang¹

2013

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Naval Postgraduate SchoolReport Documentation Page Public reporting burden for the collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington VA 22202-4302. Respondents should be aware that notwithstanding any other provision of law, no person shall be subject to a penalty for failing to comply with a collection of information if it does not display a currently valid OMB control number.

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Political Connections, SEC Enforcement and Accounting Quality

Cited by 48 publications

References 33 publications

The financial reporting environment: Review of the recent literature

The financial reporting environment: Review of the recent literature

Religious Social Norms and Corporate Financial Reporting

Political Connections of the Boards of Directors and Defense Contractors Excessive Profits

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