Discussion of 'Audit Committee Financial Expertise and Earnings Management: The Role of Status' by Badolato, Donelson, and Ege

Journal of Accounting and Economics, Volume 58, No. 2-3, November/December 2014 Forthcoming

Posted: 13 Aug 2014

See all articles by Rachel M. Hayes

Rachel M. Hayes

University of Utah - David Eccles School of Business

Date Written: July 29, 2014

Abstract

Badolato et al. (2014) (BDE) examine the effectiveness of audit committee financial expertise. They find that financial expertise does not deter irregularities unless the audit committee also has high status. I review prior research on financial expertise to place the current study in the literature and for guidance in assessing the paper’s assumptions and empirical specifications. BDE’s conclusions run counter to many of the prior findings and to broad patterns in the data. I discuss how empirical research design choices and self-selection may affect the paper’s conclusions.

Keywords: audit committees, earnings management, status, financial expertise

Suggested Citation

Hayes, Rachel M., Discussion of 'Audit Committee Financial Expertise and Earnings Management: The Role of Status' by Badolato, Donelson, and Ege (July 29, 2014). Journal of Accounting and Economics, Volume 58, No. 2-3, November/December 2014 Forthcoming, Available at SSRN: https://ssrn.com/abstract=2479006

Rachel M. Hayes (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

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