Employee Quality and Financial Reporting Outcomes

63 Pages Posted: 23 Jul 2015 Last revised: 2 Jul 2017

See all articles by Andrew C. Call

Andrew C. Call

Arizona State University (ASU) - School of Accountancy

John L. Campbell

University of Georgia - J.M. Tull School of Accounting

Dan S. Dhaliwal

University of Arizona - Department of Accounting (deceased)

James Moon

Georgia Institute of Technology - Scheller College of Business

Date Written: June 15, 2017

Abstract

We examine the association between employee quality and financial reporting outcomes. Using the average workforce education level in MSA(s) where the firm operates as a proxy for employee quality, we find that firms with a high-quality workforce exhibit higher accruals quality, fewer internal control violations, and fewer restatements. These firms also issue superior management forecasts, in terms of frequency, timeliness, accuracy, precision, and bias. Employees located at the firm’s headquarters primarily drive our findings. Our evidence suggests employee quality, particularly at a firm’s headquarters, is associated with both mandatory and voluntary disclosure quality.

Suggested Citation

Call, Andrew C. and Campbell, John L. and Dhaliwal, Dan S. and Moon, James, Employee Quality and Financial Reporting Outcomes (June 15, 2017). Journal of Accounting & Economics 64 (1), 123-149., Available at SSRN: https://ssrn.com/abstract=2634133 or http://dx.doi.org/10.2139/ssrn.2634133

Andrew C. Call

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

John L. Campbell (Contact Author)

University of Georgia - J.M. Tull School of Accounting ( email )

Athens, GA 30602
United States
706.542.3595 (Phone)
706.542.3630 (Fax)

Dan S. Dhaliwal

University of Arizona - Department of Accounting (deceased)

James Moon

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

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