Complexity of financial reporting standards and accounting expertise

• 成果类型: Article
• 署名作者: Chychyla, Roman; Leone, Andrew J.; Minutti-Meza, Miguel
• 署名单位: University of Miami; Northwestern University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2018.09.005
• 发表日期: 2019
• 关键词: ANNUAL-REPORT READABILITY; corporate governance; statement complexity; firm performance; audit committees; INTERNAL CONTROL; CURRENT EARNINGS; BOARD SIZE; determinants; QUALITY

摘要

This study tests whether firms seek to mitigate the adverse effects of Financial Reporting Complexity (FRC) by investing in accounting expertise. We develop a measure of FRC based on the complexity of accounting standards that govern annual disclosures. We find that FRC is positively related to the accounting expertise on a firm's board of directors and audit committee. We also find that accounting expertise mitigates the relation between FRC and negative reporting outcomes. Collectively, this study increases our understanding of the actions firms take to mitigate the negative consequences of FRC, and the role of accounting expertise in this setting.