Does enterprise risk management bolster investor confidence? Evidence from options-based restatement contagion, investment, and misstatements

• 成果类型: Article; Early Access
• 署名作者: Neel, Michael; Xu, Jianren
• 署名单位: University of North Texas System; University of North Texas Denton; University of North Texas System; University of North Texas Denton
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.13063
• 发表日期: 2025
• 关键词: INFORMATIONAL CONTENT; implied volatility; propensity score; Firm value; dark side; crash; peer; determinants; COMPETITION; cost

摘要

Using industry restatement contagion as an external negative shock, we study the effectiveness of enterprise risk management (ERM) in mitigating downside risk and enhancing investor confidence. We find that ERM curbs overinvestment and earnings misstatement among firms when other firms in their industry engage in undisclosed misstatements that are subsequently restated. Following the announcements of these industry restatements, peers with ERM experience a smaller increase in implied volatility skewness. These effects are driven by peers with young CEOs, complex segment structures, low prior earnings performance, and in competitive industries. Overall, our findings highlight ERM's role in bolstering investor confidence by effectively managing firms' underlying risks.