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Full-Text Articles in Business
Do Politically Connected Directors Affect Accounting Quality? Evidence From China's Anti-Corruption Campaign (Rule 18), Ole-Kristian Hope, Heng Yue, Qinlin Zhong
Do Politically Connected Directors Affect Accounting Quality? Evidence From China's Anti-Corruption Campaign (Rule 18), Ole-Kristian Hope, Heng Yue, Qinlin Zhong
Research Collection School Of Accountancy
We examine the impact of politically connected directors on accounting quality using a quasi experiment in China. In October 2013, “Rule 18” was issued to prohibit government and party officials, who were concurrently holding public offices or had recently retired from such positions within the last three years, from serving as directors for publicly listed firms. The regulation is part of China’s anti-corruption campaign, and it has led to a large number of politically connected directors resigning from their roles as directors involuntarily. As such, Rule 18 has effectively weakened, if not fully discontinued, the political connections of the firms …
Accounting Quality, Stock Price Delay And Future Stock Returns, Hai Lu, Jeffrey Callen, Mozaffar Khan
Accounting Quality, Stock Price Delay And Future Stock Returns, Hai Lu, Jeffrey Callen, Mozaffar Khan
Research Collection School Of Accountancy
ln frictionless capital markets with complete information and rational investors, stock prices adjust to new information instantaneously and completely. However, a substantial body of research studies information imperfections such as asymmetric information and incomplete information. Information imperfections potentially hinder timely price discovery and are likely associated with delayed stock price adjustment to information. Our first research question therefore is whether the quality of accounting information (or ”accounting quality”) is one such information imperfection that is associated with cross-sectional variation in stock price delay. We define accounting quality as the precision with which financial reports convey information to equity investors about …