Author : Jagan Krishnan
Publisher :
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (129 download)
Book Synopsis Audit Committee Financial Expertise, Litigation Risk and Corporate Governance by : Jagan Krishnan
Download or read book Audit Committee Financial Expertise, Litigation Risk and Corporate Governance written by Jagan Krishnan and published by . This book was released on 2014 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent debates on audit committee financial expertise have focused on quot;accountingquot; and quot;non-accountingquot; financial experts. A significant proportion of firms do not appoint accounting financial experts (i.e., persons with specialized accounting/auditing experience) to their audit committees. We examine the determinants of firms' choice of the quot;audit committee financial expertsquot;, for a sample of Fortune 1000 firms. We test the relation between the demand for accounting financial experts (AFEs), potential litigation risk, and corporate governance. We find that firms with higher litigation risk are more likely to have AFEs on their audit committee. However, the association between litigation risk and the likelihood of appointing accounting financial experts occurs for firms with relatively strong governance but not for those with weak governance. Thus, our findings indicate that (1) companies with demand for accounting financial experts - measured by potential litigation risk - seem to be able to secure accounting financial experts but (2) such benefits only accrue in the presence of otherwise strong corporate governance.