External Corporate Governance and Misreporting
48 Pages Posted: 26 Jul 2005 Last revised: 24 Jun 2016
Date Written: November 6, 2013
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.
Keywords: Corporate Governance, Strong board, External Governance, Accounting Restatement
JEL Classification: G34, M41, M43
Suggested Citation: Suggested Citation