Abstract

http://ssrn.com/abstract=2230771
 
 

References (22)



 
 

Footnotes (8)



 


 



Smokescreen: How Managers Behave When They Have Something to Hide


Tanja Artiga González


University of St. Gallen - SoF: School of Finance

Markus M. Schmid


University of St. Gallen - Swiss Institute of Banking and Finance; University of St. Gallen - SoF: School of Finance

David Yermack


New York University (NYU) - Stern School of Business

August 13, 2014

NYU Working Paper No. FIN-13-002

Abstract:     
We study financial reporting and corporate governance in 218 companies accused of price fixing. In corporate governance, cartel firms favor outside directors likely to monitor inattentively due to low attendance, other board seats, and overseas residence. When directors resign, they are often not replaced, and auditors are rarely switched. Cartel firms have unusually low CEO turnover and rely on internal management promotions. Their managers exercise stock options faster than managers of other firms. Cartel firms are large donors to political candidates. These firms engage in evasive financial reporting strategies, including earnings smoothing, segment reclassification, and restatements. While our results are based only upon firms engaged in price fixing, we expect that they should apply generally to all companies in which managers seek to conceal poor performance or wrongdoing.

Number of Pages in PDF File: 62

Keywords: Cartels, price fixing, accounting fraud, boards of directors, corporate governance

JEL Classification: D43, G34, K42, L40, M43

working papers series





Download This Paper

Date posted: March 10, 2013 ; Last revised: December 14, 2014

Suggested Citation

Artiga González, Tanja and Schmid, Markus M. and Yermack, David, Smokescreen: How Managers Behave When They Have Something to Hide (August 13, 2014). NYU Working Paper No. FIN-13-002. Available at SSRN: http://ssrn.com/abstract=2230771

Contact Information

Tanja Artiga Gonzalez
University of Saint Gallen - SoF: School of Finance ( email )
Rosenbergstrasse 52
St.Gallen, CH-9000
Switzerland
Markus M. Schmid
University of Saint Gallen - Swiss Institute of Banking and Finance ( email )
Rosenbergstrasse 52
St. Gallen, 9000
Switzerland
University of Saint Gallen - SoF: School of Finance ( email )
Rosenbergstrasse 52
St.Gallen, CH-9000
Switzerland

David Yermack (Contact Author)
New York University (NYU) - Stern School of Business ( email )
44 West 4th Street
Suite 9-160
New York, NY 10012-1126
United States
212-998-0357 (Phone)
212-995-4220 (Fax)
HOME PAGE: http://www.stern.nyu.edu/~dyermack
Feedback to SSRN


Paper statistics
Abstract Views: 1,980
Downloads: 675
Download Rank: 13,464
References:  22
Footnotes:  8

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.438 seconds