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Full-Text Articles in Accounting
Director Tenure Diversity And Board Monitoring Effectiveness, Na Li, Aida Sijamic Wahid
Director Tenure Diversity And Board Monitoring Effectiveness, Na Li, Aida Sijamic Wahid
Research Collection School Of Accountancy
This study examines the impact of director tenure diversity on board effectiveness. We find that tenure-diverse boards exhibit significantly higher CEO performance-turnover sensitivity and that firms with tenure-diverse audit committees are less likely to experience accounting restatements. Furthermore, we document that tenure-diverse compensation committees also award less excess compensation and are less likely to overcompensate. Even though tenure-diverse boards seem to exhibit superior monitoring performance, there is limited evidence that their firms exhibit superior financial performance. The findings suggest that recent calls for board renewal, to the extent that it would increase tenure diversity rather than just decrease average board …
Shareholder Litigation And Corporate Disclosure: Evidence From Derivative Lawsuits, Thomas Bourveau, Yun Lou, Rencheng Wang
Shareholder Litigation And Corporate Disclosure: Evidence From Derivative Lawsuits, Thomas Bourveau, Yun Lou, Rencheng Wang
Research Collection School Of Accountancy
Using the staggered adoption of universal demand (UD) laws in the United States, we study the effect of shareholder litigation risk on corporate disclosure. We find that disclosure significantly increases after UD laws make it more difficult to file derivative lawsuits. Specifically, firms issue more earnings forecasts and voluntary 8-K filings, and increase the length of management discussion and analysis (MD&A) in their 10-K filings. We further assess the direct and indirect channels through which UD laws affect firms' disclosure policies. We find that the effect of UD laws on corporate disclosure is driven by firms facing relatively higher ex …
Director Tenure Diversity And Board Monitoring Effectiveness, Na Li, Aida Sijamic Wahid
Director Tenure Diversity And Board Monitoring Effectiveness, Na Li, Aida Sijamic Wahid
Research Collection School Of Economics
This study examines the impact of director tenure diversity on board effectiveness. We find that tenure-diverse boards exhibit significantly higher CEO performance-turnover sensitivity and that firms with tenure-diverse audit committees are less likely to experience accounting restatements. Furthermore, we document that tenure-diverse compensation committees also award less excess compensation and are less likely to overcompensate. Even though tenure-diverse boards seem to exhibit superior monitoring performance, there is limited evidence that their firms exhibit superior financial performance. The findings suggest that recent calls for board renewal, to the extent that it would increase tenure diversity rather than just decrease average board …
Disproportionate Insider Control And The Demand For Audit Quality, Arno Forst, Barry Hettler
Disproportionate Insider Control And The Demand For Audit Quality, Arno Forst, Barry Hettler
School of Accountancy Faculty Publications and Presentations
We examine the relationship between disproportionate insider control, enabled through dual-class share structures, and the demand for audit quality. Using a comprehensive hand-collected sample of U.S. dual-class firms, we find that, consistent with outside shareholders’ increased demand for external monitoring, as well as self-bonding by entrenched insiders, disproportionate insider control is positively associated with the propensity to hire a Big 4 or industry specialist auditor, auditor independence, and audit fees. Corroborating a self-bonding explanation, additional analyses show that audit quality mitigates the negative association of disproportionate insider control and firm value. In expanded analyses, we also investigate the separate effects …
Heightened Shareholder Interest In Firm Affairs Following The Inception Of Credit Default, Hyun Hong, Ji Woo Ryou, Anup Srivastava
Heightened Shareholder Interest In Firm Affairs Following The Inception Of Credit Default, Hyun Hong, Ji Woo Ryou, Anup Srivastava
School of Accountancy Faculty Publications and Presentations
The literature shows that a lender becomes reluctant to aid a distressed client after it receives insurance on its outstanding debt via a credit default swap (CDS). The onset of CDS trade thus accelerates client bankruptcy. We predict that the client firm’s shareholders would respond by demanding improved corporate governance and financial reporting quality to protect their interests. We find an increase in independence of the board of directors and a decline in the dual position of chief executive office and board chairman following the onset of CDS trading. We also find higher earnings response coefficient and trading volumes around …