Audit committee financial expertise and earnings management: The role of status

• 成果类型: Article
• 署名作者: Badolato, Patrick G.; Donelson, Dain C.; Ege, Matthew
• 署名单位: University of Texas System; University of Texas Austin; State University System of Florida; University of Florida
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2014.08.006
• 发表日期: 2014
• 关键词: CORPORATE GOVERNANCE; INTERNAL CONTROL; UPPER ECHELONS; Accruals quality; DIRECTORS; BOARD; CONSEQUENCES; RESTATEMENTS; ORGANIZATION; association

摘要

Regulatory pressure to increase both audit committee financial expertise and board independence has resulted in lower status for audit committees relative to management. This status differential is relevant because expertise and relative status are important determinants of each party's ability to influence outcomes, particularly when parties face conflicting goals. We find that audit committees with both financial expertise and high relative status are associated with lower levels of earnings management, as measured by accounting irregularities and abnormal accruals. These results speak to benefits and limitations of financial expertise, which have been the focus of considerable debate. (C) 2014 Elsevier B.V. All rights reserved.