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題名 How do companies react to restatements? - Evidence from audit committee compensation
作者 Liu, Xinming
Yu, Hung-Chao
俞洪昭
貢獻者 會計系
關鍵詞 Alignment effect; audit committee; equity-based compensation; restatements
日期 2018
上傳時間 7-十一月-2018 17:05:13 (UTC+8)
摘要 This study examines whether firms react to restatements by adjusting equity-based compensation paid to their audit committees and whether such adjustment is effective in improving the quality of firms` financial reporting. Three major findings are documented. First, larger equity-based compensation aligns the interests between audit committees and shareholders in S&P 1500 firms, leading to lower restatement likelihood. In contrast, larger equity-based compensation induces audit committees to compromise independence in non-S&P 1500 firms, leading to higher restatement likelihood. Second, S&P 1500 firms increase equity-based compensation to both AC chairs and other AC members following restatements to enhance the alignment effect. Differently, non-S&P 1500 firms reduce equity-based compensation paid to audit committee chairs rather than other members following restatements to mitigate the entrenchment effect. Importantly, restating firms adjust equity compensation only to audit committee members but not to CEOs or other board committee members. Finally, reducing (increasing) audit committees` equity-based compensation is effective in improving non-S&P 1500`s (S&P 1500`s) quality of financial statements after restatements. These findings are robust to controlling for endogeneity, including corporate governance variables, dropping firms who discharge auditors and CEOs, and considering nonlinearity. Our empirical results bear important implications for regulators and investors.
關聯 ASIA-PACIFIC JOURNAL OF ACCOUNTING & ECONOMICS, 25(5), 546-585
資料類型 article
DOI http://dx.doi.org/10.1080/16081625.2017.1377622
dc.contributor 會計系
dc.creator (作者) Liu, Xinming
dc.creator (作者) Yu, Hung-Chao
dc.creator (作者) 俞洪昭
dc.date (日期) 2018
dc.date.accessioned 7-十一月-2018 17:05:13 (UTC+8)-
dc.date.available 7-十一月-2018 17:05:13 (UTC+8)-
dc.date.issued (上傳時間) 7-十一月-2018 17:05:13 (UTC+8)-
dc.identifier.uri (URI) http://nccur.lib.nccu.edu.tw/handle/140.119/120841-
dc.description.abstract (摘要) This study examines whether firms react to restatements by adjusting equity-based compensation paid to their audit committees and whether such adjustment is effective in improving the quality of firms` financial reporting. Three major findings are documented. First, larger equity-based compensation aligns the interests between audit committees and shareholders in S&P 1500 firms, leading to lower restatement likelihood. In contrast, larger equity-based compensation induces audit committees to compromise independence in non-S&P 1500 firms, leading to higher restatement likelihood. Second, S&P 1500 firms increase equity-based compensation to both AC chairs and other AC members following restatements to enhance the alignment effect. Differently, non-S&P 1500 firms reduce equity-based compensation paid to audit committee chairs rather than other members following restatements to mitigate the entrenchment effect. Importantly, restating firms adjust equity compensation only to audit committee members but not to CEOs or other board committee members. Finally, reducing (increasing) audit committees` equity-based compensation is effective in improving non-S&P 1500`s (S&P 1500`s) quality of financial statements after restatements. These findings are robust to controlling for endogeneity, including corporate governance variables, dropping firms who discharge auditors and CEOs, and considering nonlinearity. Our empirical results bear important implications for regulators and investors.en_US
dc.format.extent 130 bytes-
dc.format.mimetype text/html-
dc.relation (關聯) ASIA-PACIFIC JOURNAL OF ACCOUNTING & ECONOMICS, 25(5), 546-585
dc.subject (關鍵詞) Alignment effect; audit committee; equity-based compensation; restatements
dc.title (題名) How do companies react to restatements? - Evidence from audit committee compensationen_US
dc.type (資料類型) article
dc.identifier.doi (DOI) 10.1080/16081625.2017.1377622
dc.doi.uri (DOI) http://dx.doi.org/10.1080/16081625.2017.1377622