Abstract This study examines the effect of managerial academic experience on firms’ financial reporting quality. Using data from China, we find that firms with top managers possessing exhibit lower levels both accrual and real earnings management, along a probability future restatements. is more pronounced for inefficient external monitoring, suggesting higher quality mainly explained by managers’ intrinsic motivation to report truthfully. The results hold when use firm fixed‐effect...

ABSTRACT Corporate social responsibility (CSR) disclosure is becoming increasingly important for modern corporations. Focusing on voluntary CSR and drawing upper echelons theory, we propose that the manifestation of managerial preferences (e.g., managers’ professional ethical values standards). Specifically, argue top executives with an academic background tend to have higher standards than their non-academic counterparts. These lead them act self-restraint perceive as opportunity rather a...

SUMMARY We analyze the consequences of a firm hiring generalist CEO in terms audit fees paid by firm. find that clients with CEOs are higher than those specialist CEOs. This relation is robust to considering managerial ability, other characteristics, various fixed effects, instrumental variables, and change analyses. further show fee differences larger for firms weaker monitoring corporate litigation risks. Through path analysis, we both client business risk misreporting contribute...

Abstract We examine how common institutional investors (CIIs) facilitate the financial reporting comparability (FRC) of US firms. Common ownership increases FRC firms that are directly owned by CIIs (via a direct effect) and has positive spillover effects on other in same industry. find two types firms: (1) those commonly different but connected through firms, (2) do not have any ownership. These results suggest effect goes beyond extends to non‐commonly Furthermore, we mechanisms for...

This study examines the effect of stock liquidity on corporate risk-taking behavior. We find that has a positive and significant risk-taking. consistent results when we use split share structure reform (SSSR) in China as an exogenous shock to liquidity. also investigate channels through which affects increases lower cost capital increase pay-for-performance sensitivity managers. Finally, conduct cross-sectional tests rule out privatization alternative explanation for our results. Our sheds...

This paper examines the effect of political uncertainty on voluntary management earnings forecasts. Using Chinese A-share listed companies from 2006 to 2013, we find that managers are more likely issue forecasts and increase precision after turnover Provincial Party Secretary. The is pronounced for Non-State Owned Enterprises, when new official comes other provinces, or firms with analyst coverage. Further analysis shows market reaction stronger high. Our study sheds light real effects...

We analyze the consequences of a firm hiring generalist CEO in terms audit fees paid by firm. find that clients with CEOs are higher than those specialist CEOs. This relation is robust to considering managerial ability, other characteristics, various fixed effects, instrumental variables, and change analyses. further show fee differences larger for firms weaker monitoring corporate litigation risks. Through path analysis, we both client business risk misreporting contribute difference....

This study examines the effect of common institutional ownership on corporate pension funding. We posit that a owner's incentive to maximize shareholder value may come at cost employee welfare. Consistent with this prediction, we find robust evidence firms demonstrate greater underfunding than without ownership. increases firms' value-added activities, owners' shareholding, duration ownership, and portfolio size. It decreases labor union power managers' own interests. Overall, our results...

Prior studies suggest that financial accounting audits improve earnings quality and exert positive effects on a firm’s cost of capital/investments. We argue, however, managers who have experienced prior downward audit adjustments, will react myopically by increasing future real management activities, potentially leading to subsequent poor operating performance. Using unique adjustment data from China, we document significant increase activities simultaneous decrease accrual-based post...

We examine the role of institutional investors, in particular common blockholders, facilitating financial reporting comparability U.S. firms. define ownership as a situation where given investor holds at least 5% shares two firms same industry. find that increases firm’s statements to those its industry peers. The effect is stronger when blockholders invest higher number industry, they hold longer investment horizon/a larger stake firm, and rely more on public information. Next, we show...

Exploiting the staggered establishment of public audit oversight boards (POBs) worldwide and employing a difference-in-differences methodology, we find that patents patent citations increase significantly following implementation oversight. This is especially so in client firms from countries where national POBs publicly disclose inspection reports or whose auditors have greater industry expertise. Moreover, evidence consistent with promoting innovation activities by relaxing firms’...