Abstract

https://ssrn.com/abstract=966379
 
 

References (54)



 
 

Citations (33)



 


 



The Quality of Accounting Information in Politically Connected Firms


Paul K. Chaney


Vanderbilt University - Accounting

Mara Faccio


University of Chicago - Booth School of Business; Purdue University - Krannert School of Management; European Corporate Governance Institute (ECGI); National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER)

David C. Parsley


Vanderbilt University – Finance

July 6, 2010

AFA 2010 Atlanta Meetings Paper

Abstract:     
We document that the quality of earnings reported by politically connected firms is significantly poorer than that of similar non-connected companies. Our results are not due to firms with ex-ante poor earnings quality establishing connections more often. Instead, our results suggest that, because of a lesser need to respond to market pressures to increase the quality of information, connected companies can afford disclosing lower quality accounting information. In particular, lower quality reported earnings is associated with a higher cost of debt only for the non-politically connected firms in the sample.

Number of Pages in PDF File: 48

Keywords: Political connections, information quality, accruals quality

JEL Classification: F30, G30, G32, G34, M41, M43


Open PDF in Browser Download This Paper

Date posted: March 1, 2007 ; Last revised: November 17, 2012

Suggested Citation

Chaney, Paul K. and Faccio, Mara and Parsley, David C., The Quality of Accounting Information in Politically Connected Firms (July 6, 2010). AFA 2010 Atlanta Meetings Paper. Available at SSRN: https://ssrn.com/abstract=966379 or http://dx.doi.org/10.2139/ssrn.966379

Contact Information

Paul K. Chaney
Vanderbilt University - Accounting ( email )
Nashville, TN 37203
United States

Mara Faccio (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
Purdue University - Krannert School of Management ( email )
1310 Krannert Building
West Lafayette, IN 47907-1310
United States
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER) ( email )
BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore
David C. Parsley
Vanderbilt University – Finance ( email )
401 21st Avenue South
Nashville, TN 37203
United States
615-322-0649 (Phone)
615-343-7177 (Fax)

Feedback to SSRN


Paper statistics
Abstract Views: 9,717
Downloads: 2,547
Download Rank: 3,345
References:  54
Citations:  33