Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Accounting
Audit Committee Incentive Compensation And Accounting Restatements, Deborah Archambeault, F. Todd Dezoort, Dana Hermanson
Audit Committee Incentive Compensation And Accounting Restatements, Deborah Archambeault, F. Todd Dezoort, Dana Hermanson
Deborah Archambeault
This study investigates whether incentive-based compensation for audit committee members is associated with accounting restatements. We use an agency framework to predict that short-term (long-term) incentive compensation for audit committee members will increase (decrease) the likelihood of accounting restatements due to error or fraud. Using a matched-sample logistic regression with 153 restatement and 153 nonrestatement companies, we find the predicted positive relation between short-term incentive compensation (short-term stock option grants) for audit committee members and likelihood of restatement. However, the long-term incentive compensation results contradict prediction and indicate a significant positive relation between audit committee member long-term incentive compensation {long-term …