Audit Committee Independence and Disclosure: Choice for Financially Distressed Firms

11 Pages Posted: 29 Sep 2003

See all articles by Joseph V. Carcello

Joseph V. Carcello

University of Tennessee

Terry L. Neal

University of Tennessee

Abstract

This study examines the relation between audit committee independence and disclosure choice for financially distressed US firms. The tenor of both the financial statement notes and Management Discussion and Analysis (MD&A) is considered. For firms experiencing financial distress, there is a significant positive relation between the percentage of affiliated directors on the audit committee and the optimism of the going-concern discussion in both the notes and the MD&A. These results add to the growing body of literature documenting a relation between audit committee independence and financial reporting quality.

Suggested Citation

Carcello, Joseph V. and Neal, Terry L., Audit Committee Independence and Disclosure: Choice for Financially Distressed Firms. Available at SSRN: https://ssrn.com/abstract=444341

Joseph V. Carcello (Contact Author)

University of Tennessee ( email )

Department of Accounting & Information Management
629 Stokely Management Center
Knoxville, TN 37996-0560
United States
865-974-1757 (Phone)
865-974-4631 (Fax)

Terry L. Neal

University of Tennessee ( email )

639 Stokely Management Center
Knoxville, TN 37996-0560
United States
865-974-2664 (Phone)
865-974-4631 (Fax)

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