The initiation of audit committee interlocks and the contagion of accounting policy choices: evidence from special items

• 成果类型: Article
• 署名作者: Dharwadkar, Ravi; Harris, David; Shi, Linna; Zhou, Nan
• 署名单位: Syracuse University; University System of Ohio; University of Cincinnati
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-019-09516-w
• 发表日期: 2020
• 页码: 120-158
• 关键词: restructuring charges; Board interlocks; predictive-value; pro forma; earnings; DIRECTOR; persistence; diffusion; disclosure; experience

摘要

We document that the initiation of audit committee interlocks is associated with contagion in reported special items. We argue that this is, in part, attributable to contagion of accounting policy choices. We find that the special items of newly interlocked firms, unrelated before interlock, become positively correlated afterward, suggesting information transfer starts with interlock formation. This result holds for negative special items, key components of special items (asset impairments, restructuring costs, and gains/losses from asset sales), and is stronger for larger firms and for firms within the same industry.