Abstract

http://ssrn.com/abstract=2230771
 
 

References (22)



 
 

Footnotes (1)



 


 



Smokescreen: How Managers Behave When They Have Something to Hide


Tanja Artiga González


VU University Amsterdam

Markus M. Schmid


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

David Yermack


New York University (NYU) - Stern School of Business

November 9, 2015

NYU Working Paper No. FIN-13-002
University of St.Gallen, School of Finance Research Paper No. 2013/9

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


Open PDF in Browser Download This Paper

Date posted: March 10, 2013 ; Last revised: November 10, 2015

Suggested Citation

Artiga González, Tanja and Schmid, Markus M. and Yermack, David, Smokescreen: How Managers Behave When They Have Something to Hide (November 9, 2015). NYU Working Paper No. FIN-13-002; University of St.Gallen, School of Finance Research Paper No. 2013/9. Available at SSRN: http://ssrn.com/abstract=2230771 or http://dx.doi.org/10.2139/ssrn.2230771

Contact Information

Tanja Artiga Gonzalez
VU University Amsterdam ( email )
De Boelelaan 1105
Amsterdam, North Holland 1081 HV
Netherlands
Markus M. Schmid
University of St. Gallen - Swiss Institute of Banking and Finance ( email )
Rosenbergstrasse 52
St. Gallen, 9000
Switzerland

University of St. Gallen - 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: 3,401
Downloads: 952
Download Rank: 16,140
References:  22
Footnotes:  1

© 2016 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollobot1 in 0.313 seconds