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Full-Text Articles in Business Law, Public Responsibility, and Ethics

Societal Trust And Corporate Tax Avoidance, Kiridaran Kanagaretnam, Jimmy Lee, Chee Yeow Lim, Gerald Lobo Dec 2018

Societal Trust And Corporate Tax Avoidance, Kiridaran Kanagaretnam, Jimmy Lee, Chee Yeow Lim, Gerald Lobo

Research Collection School Of Accountancy

Using aninternational sample of firms from 25 countries and a country-level index for societal trust, we document that societal trust is negatively associated with tax avoidance, even after controlling for other institutional determinants, such as home country legal institutions and tax system characteristics.We explore the effects of two country-level institutional characteristics—strength of lega linstitutions and capital market pressure—on the relation between societal trust and tax avoidance. We find that the relation between trust and tax avoidance is less pronounced when legal institutions in a country are stronger and is more pronounced when capital market pressure is stronger ...


Reading Between The Lines: Not All Csr Is Good Csr, David K. Ding, Christo Ferreira, Udomsak Wongchoti Aug 2018

Reading Between The Lines: Not All Csr Is Good Csr, David K. Ding, Christo Ferreira, Udomsak Wongchoti

Research Collection Lee Kong Chian School Of Business

Purpose: This paper aims to investigate whether corporate social responsibility (CSR), as evidenced in annual financial reports, is associated with a firm’s financial performance in New Zealand. Design/methodology/approach: A word count approach of several key CSR indicators found in the audited financial reports of NZX50 constituent firms is used. Several variables are constructed that measure the presence of CSR within the annual report such as sustainability, responsibility, social, environment, diversity, employee and community, and eight other variables within the annual report that measure the penetration of stakeholder engagement. Control variables and alternative measures of CSR are also ...


Cross-Country Evidence On The Role Of Independent Media In Constraining Corporate Tax Aggressiveness, Kiridaran Kanagaretnam, Jimmy Lee, Chee Yeow Lim, Gerald J. Lobo Jul 2018

Cross-Country Evidence On The Role Of Independent Media In Constraining Corporate Tax Aggressiveness, Kiridaran Kanagaretnam, Jimmy Lee, Chee Yeow Lim, Gerald J. Lobo

Research Collection School Of Accountancy

Using an international sample of firms from 32 countries, we study the relation between media independence and corporate tax aggressiveness. We measure media independence by the extent of private ownership and competition in the media industry. Using an indicator variable for tax aggressiveness when the firm’s corporate tax avoidance measure is within the top quartile of each country-industry combination, we find strong evidence that media independence is associated with a lower likelihood of tax aggressiveness, after controlling for other institutional determinants, including home-country tax system characteristics. We also find that the effect of media independence is more pronounced when ...


On The Foundations Of Corporate Social Responsibility, Hao Liang, Luc Renneboog Apr 2017

On The Foundations Of Corporate Social Responsibility, Hao Liang, Luc Renneboog

Research Collection Lee Kong Chian School Of Business

A firm’s corporate social responsibility (CSR) practice and its country’s legal origin are strongly correlated. This relation is valid for various CSR ratings coming from several large datasets that comprise more than 23,000 large companies from 114 countries. We find that CSR is more strongly and consistently related to legal origins than to “doing good by doing well”-factors, and most firm and country characteristics such as ownership concentration, political institutions, and degree of globalization. In particular, companies from common law countries have lower level of CSR than companies from civil law countries, and Scandinavian civil law ...


The Importance Of Being An Ethical Company, Singapore Management University Jan 2017

The Importance Of Being An Ethical Company, Singapore Management University

Research@SMU: Connecting the Dots

Firms must fine-tune their corporate governance mechanisms to prevent unethical behaviour and take quick action once they are found, says Professor Cheng Qiang.

See the papers:


Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog Dec 2016

Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog

Research Collection Lee Kong Chian School Of Business

In the corporate finance tradition, starting with Berle and Means (1932), corporations should generally be run to maximize shareholder value. The agency view of corporate social responsibility (CSR) considers CSR an agency problem and a waste of corporate resources. Given our identification strategy by means of an instrumental variable approach, we find that well-governed firms that suffer less from agency concerns (less cash abundance, positive pay-for-performance, small control wedge, strong minority protection) engage more in CSR. We also find that a positive relation exists between CSR and value and that CSR attenuates the negative relation between managerial entrenchment and value.


Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog Aug 2016

Socially Responsible Firms, Allen Ferrell, Hao Liang, Luc Renneboog

Research Collection Lee Kong Chian School Of Business

In the corporate finance tradition starting with Berle & Means (1923), corporations should generally be run so as to maximize shareholder value. The agency view of corporate social responsibility (CSR) considers CSR as an agency problem and a waste of corporate resources. Given our identification strategy by means of an IV approach, we find that well-governed firms who suffer less from agency concerns (less cash abundance, positive pay-for-performance, small control wedge, strong minority protection) engage more in CSR. We also find a positive relation between CSR and value and that CSR attenuates the negative relation between managerial entrenchment and value.


Governance And Post-Repurchase Performance, Gary Caton, Choo Yong, Jeremy Goh, Yen Teik Lee, Scott Linn Aug 2016

Governance And Post-Repurchase Performance, Gary Caton, Choo Yong, Jeremy Goh, Yen Teik Lee, Scott Linn

Research Collection Lee Kong Chian School Of Business

Payout policies based on share repurchase programs provide greater flexibility than do those based on cash dividends. We develop and test an empirical model in which strongly governed companies outperform weakly governed companies after announcing share repurchase programs. Our findings include positive associations between strong governance and both post-announcement adjusted operating performance and abnormal stock returns. The results are robust to sample selection bias, different sample criteria, governance measurement, and various control variables. In addition, governance strength is associated with larger post-announcement changes in CEO incentive compensation and merger and acquisition activity, both of which we argue are consistent with ...


Internal Governance And Real Earnings Management, Qiang Cheng, Jimmy Lee, Terry J. Shevlin Jul 2016

Internal Governance And Real Earnings Management, Qiang Cheng, Jimmy Lee, Terry J. Shevlin

Research Collection School Of Accountancy

We examine whether internal governance affects the extent of real earnings management in U.S. corporations. Internal governance refers to the process through which key subordinate executives provide checks and balances in the organization and affect corporate decisions. Using the number of years to retirement to capture key subordinate executives’ horizon incentives and using their compensation relative to CEO compensation to capture their influence within the firm, we find that the extent of real earnings management decreases with key subordinate executives’ horizon and influence. The results are robust to alternative measures of internal governance and to various approaches used to ...


The Influence Of Ethical Leadership On Managerial Performance: Mediating Effects Of Mindfulness And Corporate Social Responsibility, John Joseph Williams, Alfred E. Seaman Jun 2016

The Influence Of Ethical Leadership On Managerial Performance: Mediating Effects Of Mindfulness And Corporate Social Responsibility, John Joseph Williams, Alfred E. Seaman

Research Collection School Of Accountancy

In a continuing world of corporate misdeeds and unscrupulous decision making, much of the management and academic literatures points to the incomplete knowledge of the consequences of ethics leadership. One of the bastions of ethics gatekeeping in the firm is the CFO but remarkably scant information can be found on their perceptions concerning ethics leadership. This study addresses this void by examining mindfulness and corporate social responsibility (CSR) initiatives as new mediating linkages in comprehending the influence of ethics leadership on managerial performance. Findings reveal that ethical leadership is positively associated with CSR initiatives which, in turn, operate to enhance ...


The Downside Of The Network Ties Between Ceo/Cfos And Auditors Through External Directorships: Evidence From Auditor Selection And Subsequent Audit Quality, Jaeyoon Yu, Byungjin Kwak, Myung Seok Park, Yoonseok Zang May 2016

The Downside Of The Network Ties Between Ceo/Cfos And Auditors Through External Directorships: Evidence From Auditor Selection And Subsequent Audit Quality, Jaeyoon Yu, Byungjin Kwak, Myung Seok Park, Yoonseok Zang

Research Collection School Of Accountancy

This study examines whether the professional ties of Chief Executive Officers/Chief Financial Officers (CEO/CFOs) to auditors through external directorships affect auditor selection and subsequent audit quality. Professional ties to auditors arise when the CEO/CFO of a firm (referred to as the home firm) serves as an outside director of another firm that hires an auditor (a connected auditor). Using a sample of firms with auditor switches over the period 2003-2012, we find that home firms are more likely to appoint connected auditors. Furthermore, utilizing a difference-in-differences approach, we find that home firms appointing connected auditors experience a ...


Audit Committees And Financial Reporting Quality In Singapore, Kwong Sin Leong, Jiwei Wang, Themin Suwardy, Yuanto Kusnadi Apr 2015

Audit Committees And Financial Reporting Quality In Singapore, Kwong Sin Leong, Jiwei Wang, Themin Suwardy, Yuanto Kusnadi

Research Collection School Of Accountancy

No abstract provided.


Active Cds Trading And Managers’ Voluntary Disclosure, Jae Bum Kim, Pervin K. Shroff, Dushyantk Umar Vyas, Regina Wittenberg Moerman Jan 2015

Active Cds Trading And Managers’ Voluntary Disclosure, Jae Bum Kim, Pervin K. Shroff, Dushyantk Umar Vyas, Regina Wittenberg Moerman

Research Collection School Of Accountancy

No abstract provided.


Firm Litigation Risk And The Insurance Value Of Corporate Social Performance, Ping-Sheng Koh, Cuili Qian, Heli Wang Oct 2014

Firm Litigation Risk And The Insurance Value Of Corporate Social Performance, Ping-Sheng Koh, Cuili Qian, Heli Wang

Research Collection Lee Kong Chian School Of Business

This paper advances the risk management perspective that superior social performance enhances firm value by serving as an ex ante valuable insurance mechanism. We posit that good social performance is more valuable as an insurance mechanism for firms with higher litigation risks. Moreover, value generation of corporate social performance (CSP) depends on whether a firm has gained pragmatic legitimacy (i.e., a firm's financial health) and moral legitimacy (i.e., whether or not a firm operates in a socially contested industry) among its stakeholders. We find that the value of CSP as insurance against litigation risk is practically significant ...


Societal Trust And Corporate Tax Avoidance, Jimmy Kiat Bee Lee, Chee Yeow Lim, Kiridaran Kanagaretnam, Gerry Lobo Jun 2014

Societal Trust And Corporate Tax Avoidance, Jimmy Kiat Bee Lee, Chee Yeow Lim, Kiridaran Kanagaretnam, Gerry Lobo

Research Collection School Of Accountancy

No abstract provided.


Active Cds Trading And Managers’ Voluntary Disclosure, Jae Bum Kim, Pervin K. Shroff, Dushyantk Umar Vyas, Regina Wittenber Mar 2014

Active Cds Trading And Managers’ Voluntary Disclosure, Jae Bum Kim, Pervin K. Shroff, Dushyantk Umar Vyas, Regina Wittenber

Research Collection School Of Accountancy

No abstract provided.


Does Corporate Governance Make Financial Reports Better, Or Just Better For Equity Investors?, Dan Segal, Benjamin Segal, Shai Levi Jan 2014

Does Corporate Governance Make Financial Reports Better, Or Just Better For Equity Investors?, Dan Segal, Benjamin Segal, Shai Levi

Research Collection School Of Accountancy

Financial reports should provide useful information to both shareholders and creditors, according to U.S. accounting principles. However, directors of corporations have fiduciary duties only toward equity holders, and those fiduciary duties normally do not extend to the interests of creditors. We examine whether this slant in corporate governance biases financial reports in favor of equity investors, and in particular leads to a downward bias in reported debt that can hurt creditors. We focus on firms’ decision to issue structured debt securities that are classified as equity in financial reports and can circumvent debt covenants. We find that when the ...


Political Connection And Firm Value, James S. Ang, David K. Ding, Tiong Yang Thong Aug 2013

Political Connection And Firm Value, James S. Ang, David K. Ding, Tiong Yang Thong

Research Collection Lee Kong Chian School Of Business

We study the effect of political connection (PC) on company value in an environment where low PC is due to better institutions and not confounded by favorable social/cultural factors. We find that in Singapore, the only country that fits this description, PC in general adds little to the value of a company. However, in industries that are subject to more stringent government regulations, PC appears to be somewhat important. Robustness checks show that alternative PC variables give rise to similar results, and the addition of control variables do not drastically change the findings. Politically connected firms have higher managerial ...


Banks' Survival During The Financial Crisis: The Role Of Regulatory Reporting Quality, Jeffrey Ng, Tjomme O. Rusticus Dec 2012

Banks' Survival During The Financial Crisis: The Role Of Regulatory Reporting Quality, Jeffrey Ng, Tjomme O. Rusticus

Research Collection School Of Accountancy

In this paper, we investigate the effect of bank transparency before the crisis on bank stability during the financial crisis that erupted in 2008. Using a large sample of private and public commercial banks in the United States, we find that transparency enhances stability. We use two measures of transparency. We develop a new measure of financial reporting transparency based on loan loss provision estimation errors. We corroborate our findings using a second measure based on the incidence of accounting restatements. We show that lower transparency before the crisis is associated with higher non-performing loans and lower profitability at the ...


Executive Compensation And Regulation Imposed Governance: Evidence From The California Non-Profit Integrity Act (2004), Tharindra Ranasinghe, S. Khumawala, S. Mishra, S. Dhole Jul 2012

Executive Compensation And Regulation Imposed Governance: Evidence From The California Non-Profit Integrity Act (2004), Tharindra Ranasinghe, S. Khumawala, S. Mishra, S. Dhole

Research Collection School Of Accountancy

No abstract provided.


Client Conservatism And Auditor-Client Contracting, Yoonseok Zang, Chee Yeow Lim, Mark Defond Jun 2012

Client Conservatism And Auditor-Client Contracting, Yoonseok Zang, Chee Yeow Lim, Mark Defond

Research Collection School Of Accountancy

Auditors risk costly litigation and loss of reputation when they are associated with clients that engage in substandard financial reporting, and prior research argues that accounting conservatism reduces managements‟ tendency to misreport. Thus, we predict that client conservatism affects auditor-client contracting by reducing auditor litigation and reputation risk. Consistent with our predictions, we find that conservative audit clients are less likely to trigger auditor litigation or issue accounting restatements; and that auditors of conservative clients charge lower audit fees, issue fewer going concern opinions, and resign less frequently. Taken together, these findings are consistent with client accounting conservatism playing an ...


Geographic Proximity Between Auditor And Client: How Does It Impact Audit Quality?, Yoonseok Zang, Jong-Hag Choi, Kim Jeong-Bon, Aini Qiu May 2012

Geographic Proximity Between Auditor And Client: How Does It Impact Audit Quality?, Yoonseok Zang, Jong-Hag Choi, Kim Jeong-Bon, Aini Qiu

Research Collection School Of Accountancy

Using a large sample of audit client firms, this paper investigates whether and how the geographic proximity between auditor and client affects audit quality proxied by accrual-based earnings quality. We define an auditor as a local auditor (1) if the auditor’s practicing office is located in the same metropolitan statistical area (MSA) as the client's headquarters and (2) if the geographic distance between the two cities where the auditor’s practicing office and the client’s headquarters are located is within 100 kilometers or they are in the same MSA. As predicted, our empirical results are consistent with ...


Auditor Reporting Under Section 404: The Association Between The Internal Control And Going Concern Audit Opinions, Beng Wee Goh Apr 2012

Auditor Reporting Under Section 404: The Association Between The Internal Control And Going Concern Audit Opinions, Beng Wee Goh

Research Collection School Of Accountancy

Section 404 of the Sarbanes-Oxley Act introduced integrated audits of internal control over financial reporting and the financial statements. Since the internal control and audit reports are joint products of the audit process, we examine whether the issuance of an internal control material weakness opinion (MWO) influences, other things equal, the issuance of a going concern audit opinion (GCO). Using a sample of financially stressed companies, we find that the issuance of a MWO increases the likelihood of a GCO, suggesting that auditors respond to the uncertainty surrounding a MWO by issuing a GCO. Further, the positive association between MWO ...


Do Abnormally High Audit Fees Impair Audit Quality?, Jong-Hag Choi, Jeong-Bon Kim, Yoonseok Zang Nov 2010

Do Abnormally High Audit Fees Impair Audit Quality?, Jong-Hag Choi, Jeong-Bon Kim, Yoonseok Zang

Research Collection School Of Accountancy

This study examines whether and how audit quality proxied by the magnitude of absolute discretionary accruals is associated with abnormal audit fees, that is, the difference between actual audit fee and the expected, normal level of audit fee. The results of various regressions reveal that the association between the two is asymmetric, depending on the sign of the abnormal audit fee. For observations with negative abnormal audit fees, there is no significant association between audit quality and abnormal audit fee. In contrast, abnormal audit fees are negatively associated with audit quality for observations with positive abnormal audit fees. Our findings ...


Corporate Governance, Investor Protection, And Auditor Choice In Emerging Markets, Mahmud Hossain, Chee Yeow Lim, Patricia Mui Siang Tan Mar 2010

Corporate Governance, Investor Protection, And Auditor Choice In Emerging Markets, Mahmud Hossain, Chee Yeow Lim, Patricia Mui Siang Tan

Research Collection School Of Accountancy

In this study, we examine the effect of firm-level governance on the firm's choice of an external auditor. Further, we test how the relation between corporate governance and auditor choice may be affected by the strength of legal environment. The results show that firm-level governance scores are positively related to the firm's auditor choice. This association is strengthened by country-level legal protection. Specifically, the positive association between auditor choice and the firm-level governance scores is weaker (stronger) in a low (high) legal environment. These findings are robust after controlling for determinants that were found to be significant in ...


Why "Democracy" And "Drifter" Firms Can Have Abnormal Returns: The Joint Importance Of Corporate Governance And Abnormal Accruals In Separating Winners From Losers, Koon Boon Kee Jan 2010

Why "Democracy" And "Drifter" Firms Can Have Abnormal Returns: The Joint Importance Of Corporate Governance And Abnormal Accruals In Separating Winners From Losers, Koon Boon Kee

Dissertations and Theses Collection (Open Access)

Do managers exercise accounting discretion in an opportunistic or efficient manner? Good governance structures, which mitigate agency costs, are necessary to ensure that the accounting information supplied by management is not opportunistically manipulated. The output of quality accounting information, in turn, serves as an input to better governance structures. Thus, governance and earnings quality (EQ) are inexorably linked through a complementarity relationship. This suggests two previously unexamined relationships. Firstly, the governance effects on performance in the influential paper by Gompers, Ishii and Metrick (2003) is overrated without good EQ, measured by the magnitude of abnormal accruals (AA), as an input ...


Why Does Corporate Governance Matter? Evidence From Seasoned Bond Offerings, Fang Wang Jan 2010

Why Does Corporate Governance Matter? Evidence From Seasoned Bond Offerings, Fang Wang

Dissertations and Theses Collection (Open Access)

To examine the importance of corporate governance, I look at how management and investors behave in the event of seasoned bond offerings, controlling for the corporate governance structure of issuing firms. I find that companies with the weakest governance structure aggressively manipulate their earnings upwards during the two years prior to the debt issuances. And when the bond offerings are announced to the market, these same firms experienced positive abnormal returns over a three day event period, indicating that investors of poorly governed firms value a debt financing for the alleged decrease in agency cost.


Does Corporate Governance Matter, Evidence From Earnings Management Practices In Singapore, Lingxu Hu Jan 2010

Does Corporate Governance Matter, Evidence From Earnings Management Practices In Singapore, Lingxu Hu

Dissertations and Theses Collection (Open Access)

This paper addresses two questions. First, do good corporate governance practices add values to company or does it lead to higher stock returns in Singapore? Second, does poorly governed listed company in SGX tend to manage their earnings by using discretionary accruals? Following the approach of Gompers et al. (2003), we formed two portfolios consisting of well-governed and poorly governed companies. Well governed companies are able to maintain a higher return relative to poorly governed companies. I also look at the firm valuation from the adoption of corporate governance practices. Our result shows a positive relationship between firm valuation and ...


Corporate Governance And Earnings Management Before Share Repurchase Announcements In Singapore, Jian Ming Chua Jan 2010

Corporate Governance And Earnings Management Before Share Repurchase Announcements In Singapore, Jian Ming Chua

Dissertations and Theses Collection (Open Access)

Share repurchase in Singapore was legalized in 1998. It is well known that investors view share repurchase as good news. This study is based on share repurchase announcements from 2006 to 2009. The mean Cumulative Market-Adjusted Returns (CAR) for the period [0, +1] and [-1, +1] are significant at 1.25% and 1.33% respectively. In Singapore, there are positive abnormal returns following share repurchase announcements in support of the ―free cash flow‖ hypothesis. By using the Singapore Corporate Governance Index as a proxy, the weakly governed companies exhibit the strongest, positive and significant CAR of 2.62% for the ...


Does Auditor Tenure Improve Audit Quality? Moderating Effects Of Industry Specialization And Fee Dependence, Chee Yeow Lim, Hun-Tong Tan, Qiang Cheng Jan 2010

Does Auditor Tenure Improve Audit Quality? Moderating Effects Of Industry Specialization And Fee Dependence, Chee Yeow Lim, Hun-Tong Tan, Qiang Cheng

Research Collection School Of Accountancy

We investigate whether the relation between auditor tenure and audit quality is conditional on auditor specialization and fee dependence. Although prior studies have investigated the relation between extended auditor-client tenure and audit quality, none has examined how this relation is jointly influenced by both auditor specialization and fee dependence. Our main analyses, using accrual quality as a measure of audit quality, show that firms audited by specialists (vs. non-specialists) have relatively higher audit quality with extended auditor tenure, and that this relation is negatively moderated by auditors’ fee dependence on clients. These results are robust to sensitivity tests, and alternative ...