Abstract

http://ssrn.com/abstract=1893011
 
 

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Financial Reports and Social Capital


Anand Jha


Texas A&M International University

August 30, 2013

American Accounting Association Annual Meeting, Denver, Colorado

Abstract:     
I examine social capital’s impact on financial reports. Based on the social capital literature, I predict that the quality of the financial reports is higher when a firm is headquartered in a high social capital region. Consistent with this prediction, I find that a firm in a high social capital region manages its accruals to a lesser extent and has lower real earnings management, a lower propensity to be prosecuted for financial misrepresentation, and a more readable financial report. These results are robust to a wide range of firm-level and regional controls. Overall, the results show that a firm headquartered in a high social capital region has higher quality financial reports.

Number of Pages in PDF File: 94

Keywords: Social Capital, Financial Report, Discretionary Accruals, Real Earnings Management, Financial Fraud, Fog Index

JEL Classification: M14, M41

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Date posted: July 25, 2011 ; Last revised: January 9, 2014

Suggested Citation

Jha, Anand, Financial Reports and Social Capital (August 30, 2013). American Accounting Association Annual Meeting, Denver, Colorado. Available at SSRN: http://ssrn.com/abstract=1893011 or http://dx.doi.org/10.2139/ssrn.1893011

Contact Information

Anand Jha (Contact Author)
Texas A&M International University ( email )
Laredo, TX 78041
United States
9563262581 (Phone)
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