External Corporate Governance and Misreporting
William R. Baber
Georgetown University - Department of Accounting and Business Law
George Washington University - School of Business
National University of Singapore
November 6, 2013
Georgetown McDonough School of Business Research Paper No. 760324
This study investigates associations between accounting restatements and external corporate governance considered as statutory and corporate charter provisions that limit shareholder participation in the governance process. The analysis indicates that characteristics of strong external governance (fewer restrictions on shareholder participation) are associated with relatively low probabilities of accounting restatement. These results are robust both when we control for internal governance characteristics frequently advanced by governance experts and imposed by regulators, and when we consider alternative external governance measures.
Number of Pages in PDF File: 48
Keywords: Corporate Governance, Strong board, External Governance, Accounting Restatement
JEL Classification: G34, M41, M43
Date posted: July 26, 2005 ; Last revised: June 11, 2014
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