Board Characteristics Audit Committee Characteristics And Abnormal Accruals

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Board Characteristics, Audit Committee Characteristics and Abnormal Accruals

Author : Michael E. Bradbury
Publisher :
ISBN 13 :
Total Pages : 29 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Board Characteristics, Audit Committee Characteristics and Abnormal Accruals by : Michael E. Bradbury

Download or read book Board Characteristics, Audit Committee Characteristics and Abnormal Accruals written by Michael E. Bradbury and published by . This book was released on 2005 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior research examines the relation between board characteristics and financial reporting violations relating to fraud and earnings overstatement. This paper examines the relation between governance (as measured by board and audit committee characteristics) and accounting quality (as measured by abnormal accruals) where there is no a priori reason to suspect systematic management of earnings. We find both board size and audit committee independence are related to higher quality accounting (i.e., lower abnormal working capital accruals). Furthermore, the relation between audit committee independence and higher quality accounting exists only when the abnormal accruals are income increasing. This suggests that audit committees are effective in the financial reporting process by reducing the level of income increasing abnormal accruals. The results also indicate that audit committees are effective only when they comprise independent directors.

Do Audit Committee and Characteristics of Board of Directors Influence Earnings Management?

Author : CPA Pathak PhD (CGA, CFF, CFE, CISA, Jag)
Publisher :
ISBN 13 :
Total Pages : 38 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Do Audit Committee and Characteristics of Board of Directors Influence Earnings Management? by : CPA Pathak PhD (CGA, CFF, CFE, CISA, Jag)

Download or read book Do Audit Committee and Characteristics of Board of Directors Influence Earnings Management? written by CPA Pathak PhD (CGA, CFF, CFE, CISA, Jag) and published by . This book was released on 2014 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Earnings management has attracted much attention in this globalized economic environment due to large accounting scandals such as Enron and WorldCom. National governments and other market-regulation institutions are taking measures to restrain earnings management in order to ensure the reliability and transparency of financial reporting. This study explores whether audit committees and boards of directors influence earnings management using the literary review method. The findings show that both discretionary accruals and abnormal accruals are mostly used as dependent variables to detect earnings manipulation estimated by the Jones and Modified Jones Models. For the most part, evidence from previous literatures indicates that the more independent the members of the audit committee and board, the higher the quality of earnings in financial reporting. However, some opposite findings exist.

Board Monitoring, Audit Committee Effectiveness, and Financial Reporting Quality

Author : Luo He
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Board Monitoring, Audit Committee Effectiveness, and Financial Reporting Quality by : Luo He

Download or read book Board Monitoring, Audit Committee Effectiveness, and Financial Reporting Quality written by Luo He and published by . This book was released on 2010 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: We review and synthesize the results of empirical studies of associations between corporate oversight measures and financial reporting quality (FRQ). We examine two oversight components, board characteristics and audit committee characteristics. For each component, we summarize associations between variables contributing to monitoring effectiveness and three presumptive FRQ monitoring outcomes: (1) ex post consequences of low FRQ, such as financial reporting fraud; (2) earnings management measures, such as abnormal accruals; and (3) perceived informativeness of financial reports, manifest in earnings-returns associations, earnings response coefficients, and analyst perceptions of FRQ. Our classification scheme provides a coherent framework for synthesizing the implications of empirical findings, highlighting the role of different corporate governance variables in enhancing different aspects of FRQ. This synthesis has the potential to inform regulators, boards of directors, and forensic accountants who are concerned with improving the oversight of public corporations and reducing opportunities for managers and others to engage in financial fraud.

Audit Committee, Board of Director Characteristics, and Earnings Management

Author : April Klein
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Audit Committee, Board of Director Characteristics, and Earnings Management by : April Klein

Download or read book Audit Committee, Board of Director Characteristics, and Earnings Management written by April Klein and published by . This book was released on 2008 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether audit committee and board characteristics are related to earnings management by the firm. The motivation behind this study is the implicit assertion by the SEC, the NYSE and the NASDAQ that earnings management and poor corporate governance mechanisms are positively related. A non-linear negative relation is found between audit committee independence and earnings manipulation. Specifically, a significant relation is found only when the audit committee has less than a majority of independent directors. Surprisingly, and in contrast to the new regulations, no significant association is found between earnings management and the more stringent requirement of 100% audit committee independence. Empirical evidence also is provided that other corporate governance characteristics are related to earnings management. Earnings management is positively related to whether the CEO sits on the board's compensation committee. It is negatively related to the CEO's shareholdings and to whether a large outside shareholder sits on the board's audit committee. These results suggest that boards structured to be more independent of the CEO may be more effective in monitoring the corporate financial accounting process.

The Relationship Between Board Characteristics and Voluntary Improvements in Audit Committee Composition and Experience

Author : Mark S. Beasley
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis The Relationship Between Board Characteristics and Voluntary Improvements in Audit Committee Composition and Experience by : Mark S. Beasley

Download or read book The Relationship Between Board Characteristics and Voluntary Improvements in Audit Committee Composition and Experience written by Mark S. Beasley and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study empirically examines the relation between certain board of director characteristics and the extent that audit committee composition voluntarily exceeds minimum mandated levels and includes outside directors with financial reporting and audit committee knowledge and experience. This study focuses on board characteristics as the board directly controls audit committee membership. Such staffing decisions can directly affect the ability of the audit committee to monitor management's financial reporting process on behalf of the board. Results suggests that Canadian firms which voluntarily include more outside directors on the audit committee than the mandated minimum have larger boards with more outsiders serving on those boards and are more likely to segregate the board chairperson position from the CEO/president positions. Additionally, firms who voluntarily create audit committees composed of outsider members with a breadth of relevant financial reporting and audit committee knowledge and experience have boards that are larger, have more outside members, and are less likely to be chaired by the CEO/president. Implications of these findings for auditors, institutional investors, regulators and other interested parties are discussed.

Audit Committee Characteristics and the Perceived Quality of Financial Reporting

Author : Andrew J. Felo
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Audit Committee Characteristics and the Perceived Quality of Financial Reporting by : Andrew J. Felo

Download or read book Audit Committee Characteristics and the Perceived Quality of Financial Reporting written by Andrew J. Felo and published by . This book was released on 2003 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we empirically examine the relationship between two audit committee characteristics - the composition (expertise and independence) and size of the audit committee - and the quality of financial reporting. We show that after controlling for firm size, board composition, a measure of management's commitment to transparency (the existence of an ethics program) and institutional ownership, the percentage of audit committee members having expertise in accounting or financial management is positively related to financial reporting quality. We also find some evidence of a positive relationship between the size of the audit committee and financial reporting quality. However, audit committee independence is not related to financial reporting quality. We also verify that our results are robust across different measures of financial reporting quality. Our results suggest that mandating greater expertise on audit committees rather than simply requiring one expert on the audit committee may be beneficial to investors. In addition, our results also provide weak support for the recommendation of the Blue Ribbon Committee that firms devote significant directorial resources to the audit committee. Given the prior evidence of a negative relationship between financial reporting quality and cost of capital, firms could improve their reporting quality by appropriately structuring their audit committees, thus reducing their cost of capital.

Audit Committee Characteristics and Financial Reporting Comparability

Author : Zhuoan Feng
Publisher :
ISBN 13 :
Total Pages : 99 pages
Book Rating : 4.:/5 (925 download)

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Book Synopsis Audit Committee Characteristics and Financial Reporting Comparability by : Zhuoan Feng

Download or read book Audit Committee Characteristics and Financial Reporting Comparability written by Zhuoan Feng and published by . This book was released on 2014 with total page 99 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial reporting comparability is one of the key qualitative characteristics that allows accounting information users to identify and understand similarities and differences in the financial performance of two firms. While prior studies manily focus on the role of accounting standards in the production of comparability, the role of economic agents and institutional incentives has been largely overlooked. To fill this gap, this study argues that a firm's audit committee, as an economic agent within the firm, is important in shaping financial reporting comparability because the audit committee oversees the financial reporting and disclosure process, and monitors the choice od accounting policies and principles.

Board Characteristics, Accounting Report Integrity, and the Cost of Debt

Author : Ronald C. Anderson
Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Board Characteristics, Accounting Report Integrity, and the Cost of Debt by : Ronald C. Anderson

Download or read book Board Characteristics, Accounting Report Integrity, and the Cost of Debt written by Ronald C. Anderson and published by . This book was released on 2014 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Creditor reliance on accounting-based debt covenants suggests that debtors are potentially concerned with board of director characteristics that influence the financial accounting process. In a sample of Samp;P 500 firms, we find that the cost of debt financing is inversely related to board independence and board size. We also examine the impact of audit committee characteristics on corporate yields spreads as audit committees are the direct mechanism that boards use to monitor the financial accounting process. We find that fully independent audit committees are associated with a significantly lower cost of debt financing. Similarly, yield spreads are also negatively related to audit committee size and the number of audit committee meetings. Overall, these results provide market-based evidence that boards and audit committees are important elements affecting the reliability of financial reports.

Audit Committees

Author : Frank M. Burke
Publisher : CCH
ISBN 13 : 9780808091646
Total Pages : 468 pages
Book Rating : 4.0/5 (916 download)

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Book Synopsis Audit Committees by : Frank M. Burke

Download or read book Audit Committees written by Frank M. Burke and published by CCH. This book was released on 2008-08 with total page 468 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Board Characteristics, Audit Committee Independence and Auditor Fees

Author : Dr. Rajnish Kumar
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Board Characteristics, Audit Committee Independence and Auditor Fees by : Dr. Rajnish Kumar

Download or read book Board Characteristics, Audit Committee Independence and Auditor Fees written by Dr. Rajnish Kumar and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effect of level of corporate governance measured in terms of the board of directors' and the audit committee's characteristics on auditor fees in the Indian corporate sector. In particular, we examine the effect of the board of directors' and the audit committee's independence, diligence, expertise and size on audit fee, non-audit fee and the ratio of non-audit fee to audit fee for the top 100 companies listed on the National Stock Exchange for the financial year 2012-13. We hypothesize that an independent, diligent, experienced and a larger board of directors require higher audit quality and hence higher audit and non-audit fees. However, there is no effect of audit committee's characteristics (independence, diligence, expertise and size) on audit and non-audit fees because of inherent dependence of the audit committee on the board as envisioned by the Companies Act, 2013. The results indicate that an independent board defined as the proportion of independent directors in the board positively affects the audit fee and there is no effect of the audit committee's characteristics on auditor fees. Even after controlling for audit committee's characteristics in the board of directors' model, an independent board and chairperson positively affect the auditor fees.

Board Characteristics And Its Impact On Firm Free Cash Flows

Author : Razieh Adinehzadeh
Publisher : LAP Lambert Academic Publishing
ISBN 13 : 9783659305108
Total Pages : 84 pages
Book Rating : 4.3/5 (51 download)

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Book Synopsis Board Characteristics And Its Impact On Firm Free Cash Flows by : Razieh Adinehzadeh

Download or read book Board Characteristics And Its Impact On Firm Free Cash Flows written by Razieh Adinehzadeh and published by LAP Lambert Academic Publishing. This book was released on 2012 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: This research tries to achieve to provide sufficient view about free cash flow and internal governance in corporate governance (CG) by addressing the relationship between board and audit characteristics with free cash flow. Specifically, this research tries to explore if internal governance practices are substitutes to control agency problem within the Malaysian firms. This book employs panel regression analysis. The panel data set comprise of 50 Malaysian companies (200 observations) which has be done for four consecutive years which comprise of 2005 to 2008. According to samples which has been taken from 2005 to 2008; the results show no significant relationship between board characteristics except board size and free cash flow. Instead, it shows a significant relationship between all audit committee variables except financial expertise and free cash flow. The finding of this book provides that the structure of audit committee is an important element in firm's decisions which consist of deciding on keeping or spending free cash flow in different ways that can be of interests to both managers and shareholders in Malaysian firms.

Evidence on the Relation Between Corporate Governance Characteristics and the Quality of Financial Reporting

Author : David W. Wright
Publisher :
ISBN 13 :
Total Pages : 46 pages
Book Rating : 4.:/5 ( download)

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Book Synopsis Evidence on the Relation Between Corporate Governance Characteristics and the Quality of Financial Reporting by : David W. Wright

Download or read book Evidence on the Relation Between Corporate Governance Characteristics and the Quality of Financial Reporting written by David W. Wright and published by . This book was released on 1996 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Final Accounting

Author : Barbara Ley Toffler
Publisher : Currency
ISBN 13 : 0767913833
Total Pages : 290 pages
Book Rating : 4.7/5 (679 download)

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Book Synopsis Final Accounting by : Barbara Ley Toffler

Download or read book Final Accounting written by Barbara Ley Toffler and published by Currency. This book was released on 2004-04-13 with total page 290 pages. Available in PDF, EPUB and Kindle. Book excerpt: A withering exposé of the unethical practices that triggered the indictment and collapse of the legendary accounting firm. Arthur Andersen's conviction on obstruction of justice charges related to the Enron debacle spelled the abrupt end of the 88-year-old accounting firm. Until recently, the venerable firm had been regarded as the accounting profession's conscience. In Final Accounting, Barbara Ley Toffler, former Andersen partner-in-charge of Andersen's Ethics & Responsible Business Practices consulting services, reveals that the symptoms of Andersen's fatal disease were evident long before Enron. Drawing on her expertise as a social scientist and her experience as an Andersen insider, Toffler chronicles how a culture of arrogance and greed infected her company and led to enormous lapses in judgment among her peers. Final Accounting exposes the slow deterioration of values that led not only to Enron but also to the earlier financial scandals of other Andersen clients, including Sunbeam and Waste Management, and illustrates the practices that paved the way for the accounting fiascos at WorldCom and other major companies. Chronicling the inner workings of Andersen at the height of its success, Toffler reveals "the making of an Android," the peculiar process of employee indoctrination into the Andersen culture; how Androids—both accountants and consultants--lived the mantra "keep the client happy"; and how internal infighting and "billing your brains out" rather than quality work became the all-important goals. Toffler was in a position to know when something was wrong. In her earlier role as ethics consultant, she worked with over 60 major companies and was an internationally renowned expert at spotting and correcting ethical lapses. Toffler traces the roots of Andersen's ethical missteps, and shows the gradual decay of a once-proud culture. Uniquely qualified to discuss the personalities and principles behind one of the greatest shake-ups in United States history, Toffler delivers a chilling report with important ramifications for CEOs and individual investors alike.

Audit Committee Characteristics and Financial Misstatement

Author : Lawrence Abbott
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Audit Committee Characteristics and Financial Misstatement by : Lawrence Abbott

Download or read book Audit Committee Characteristics and Financial Misstatement written by Lawrence Abbott and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study addresses the impact of certain audit committee characteristics identified by the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees (BRC) on the likelihood of financial misstatement. We examine 41 firms which issued fraudulent reports and 88 firms which restated annual results (without allegations of fraud) in the period 1991-1999, together with matched pairs control groups of similar size, exchange listing, industry and auditor type. We find that the independence of the audit committee and whether the committee meets at least four times per year exhibit a significant and negative association with the occurrence of financial reporting restatements. We also document a significant positive association between an audit committee that lacks a member with financial expertise and the occurrence of financial reporting restatements. However, only audit committee independence and the lack of financial expertise exhibit a negative (positive) association with financial reporting fraud. Our results underscore the importance of the BRC's first two recommendations, both of which concern audit committee independence. Our results also highlight the need for financial expertise as a means of strengthening the monitoring and oversight role that the audit committee plays in the financial reporting process.

Evidence on the Relation Between Audit Committee Characteristics and the Quality of Financial Reporting

Author : Jill Peperone Giles
Publisher :
ISBN 13 :
Total Pages : 230 pages
Book Rating : 4.:/5 (791 download)

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Book Synopsis Evidence on the Relation Between Audit Committee Characteristics and the Quality of Financial Reporting by : Jill Peperone Giles

Download or read book Evidence on the Relation Between Audit Committee Characteristics and the Quality of Financial Reporting written by Jill Peperone Giles and published by . This book was released on 1998 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Three Essays on Audit Committees and Financial Reporting Quality

Author : John Lewis Abernathy
Publisher :
ISBN 13 :
Total Pages : 141 pages
Book Rating : 4.:/5 (74 download)

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Book Synopsis Three Essays on Audit Committees and Financial Reporting Quality by : John Lewis Abernathy

Download or read book Three Essays on Audit Committees and Financial Reporting Quality written by John Lewis Abernathy and published by . This book was released on 2010 with total page 141 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation investigates the relationship between audit committee characteristics and financial reporting quality. The dissertation is organized into three essays that examine this topic. The first two essays examine audit committee characteristics and their association with various measures of financial reporting quality. Essay Three summarizes relevant literature regarding conservatism, a measure of financial reporting quality. In Essay One, I examine whether adding board members with accounting financial expertise to the audit committee is associated with an increase in a firm's accounting conservatism. The results of this study provide evidence that the addition of accounting expertise is positively associated with higher conservatism as measured by the Penman and Zhang (2000) C-Score measure of conservatism, but only for firms with a strong governance structure. For firms with weak governance, the addition of accounting expertise to the audit committee is associated with higher levels of conservatism as measured by the Givoly and Hayn (2000) negative accruals measure of conservatism. However, the addition of accounting financial expertise is not associated with higher levels of conservatism as measured by the Beaver and Ryan (2000) book-to market measure. Sensitivity analysis suggests that the addition of accounting financial expertise is associated with higher conditional conservatism as measured by the Basu (1997) asymmetric loss recognition measure. In Essay Two, I investigate the association between analyst earnings forecast properties and the presence of accounting financial expertise on audit committees. The results indicate that the presence of accounting financial expertise is associated with significantly higher forecast accuracy and significantly lower forecast dispersion. Additionally, I find that the non-accounting financial expertise is significantly associated with higher analyst forecast accuracy and lower forecast dispersion, but nonfinacial expertise is not. Essay Three summarizes relevant literature regarding conservatism, a measure of financial reporting quality.

State-of-the-Art Theories and Empirical Evidence

Author : Roshima Said
Publisher : Springer
ISBN 13 : 9811069263
Total Pages : 273 pages
Book Rating : 4.8/5 (11 download)

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Book Synopsis State-of-the-Art Theories and Empirical Evidence by : Roshima Said

Download or read book State-of-the-Art Theories and Empirical Evidence written by Roshima Said and published by Springer. This book was released on 2017-12-06 with total page 273 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book discusses several important issues related to corporate governance reporting, corporate social responsibility (CSR), fraud and bankruptcy. It gathers papers presented at the 6th International Conference on Governance, Fraud, Ethics and Social Responsibility, which was held in Penang, Malaysia on 18–19 November 2015. The content is divided into three major sub-themes: Corporate Governance and Accountability; Corporate Social Responsibility (CSR) and Sustainable Development; and Ethics, Risk and Fraud. The first sub-theme addresses recently identified issues, such as corporate governance reporting, corporate governance regulation differences between countries, governance and financial market economics, financial market supervision, and control and risk management. In turn, the second sub-theme focuses on international auditing standards, green/socially responsible investment, environmental and social accounting and auditing, CSR-related matters, legislation and CSR reporting differences for public listed companies, accounting for sustainable development performance, and sustainability assessment models. The third sub-theme puts the spotlight on financial assessment and diagnosis, modeling, hedging, fraud, bankruptcy, accounting and auditing ethics and ethical problems in financial markets. Taken together, the issues discussed here provide state of art theories and empirical evidence approached from broad perspectives, making the book a valuable resource for researchers, students and practitioners alike.