volume 35, issue 5, P685-704 2020
DOI: 10.1108/maj-07-2018-1924
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Eunjung Cho, Jeehong Kim, Sooin Kim

Abstract: Purpose The purpose of this paper is to examine whether a negative outcome (i.e. a sanction) of an inspection by Korea’s Financial Supervisory Service for an industry-leading company affects the accounting quality of other companies in the same industry. The premise is that when peer companies observe the negative results of such an inspection on a leader in their industry, they will be more concerned about their own risk during a future inspection and more likely to increase their accounting quality. Desig…

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