Is the SEC captured? Evidence from comment-letter reviews

• 成果类型: Article
• 署名作者: Heese, Jonas; Khan, Mozaffar; Ramanna, Karthik
• 署名单位: Harvard University; University of Minnesota System; University of Minnesota Twin Cities; University of Oxford
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2017.06.002
• 发表日期: 2017
• 关键词: political connections; QUALITY; RESTATEMENTS; LITIGATION; TENURE; GAAP

摘要

SEC oversight of publicly listed firms ranges from comment letter (CL) reviews of firms' reporting compliance to pursuing enforcement actions against violators. Prior literature finds that firm political connections (PC) negatively predict enforcement actions, inferring SEC capture. We present new evidence that firm PC positively predict CL reviews and substantive characteristics of such reviews, including the number of issues evaluated and the seniority of SEC staff involved. These results, robust to identification concerns, are inconsistent with SEC capture and indicate a more nuanced relation between firm PC and SEC oversight than previously suggested. (C) 2017 Elsevier B.V. All rights reserved.