Management going-concern disclosures: Impact of corporate governance and auditor reputation

European Financial Management

Volumn 12, Issue 5, 2006, Pages 789-816

  Uang, Jinn Yang ^a   Citron, David B ^b   Sudarsanam, Sudi ^c   Taffler, Richard J ^d  

^a NATIONAL DEFENSE UNIVERSITY   (Taiwan)

^b CITY UNIVERSITY   (United Kingdom)

^c CRANFIELD UNIVERSITY   (United Kingdom)

^d UNIVERSITY OF EDINBURGH   (United Kingdom)

Author keywords

Cadbury disclosure; Corporate governance; Financial distress; Going concern

Indexed keywords

EID: 34247855949     PISSN: 13547798     EISSN: 1468036X     Source Type: Journal    
DOI: 10.1111/j.1468-036X.2006.00277.x     Document Type: Conference Paper

References (58)

1. Abrahamson, E. and Amir, E. The information content of the president's letter to shareholders Journal of Business Finance & Accounting, Vol. 23, 1996, pp. 1157 82.
2. Auditing Practices Board, SAS 600: Auditors' Reports on Financial Statements (London : APB, 1993).
3. Auditing Practices Board, SAS 130: The Going-concern Basis in Financial Statements (London : APB, 1994).
4. Auditing Practices Board, Corporate Governance Reporting and Auditors' Responsibilities Statements (London : APB, 1998).
5. Balachandran, B. and Nagarajan, N. Imperfect information, insurance and auditors legal liability Contemporary Accounting Research, Vol. 3 1987, pp. 281 301.
6. Baliga, B. R., Moyer, R. C. and Rao, R. S. CEO duality and firm performance: what's the fuss? Strategic Management Journal, Vol. 17, 1996, pp. 41 53.
7. Beasley, M. S. An empirical analysis of the relation between the board of director composition and financial statement fraud The Accounting Review, Vol. 71, 1996, pp. 443 465.
8. Bhushan, R. Firm characteristics and analyst following Journal of Accounting and Economics, Vol. 11, 1989, pp. 255 274.
9. Brancato, C. Institutional investors: where the growth is Across the Board, May 1996, pp. 56 58.
10. Brickley, J. A., Lease, R. and Smith, C. W. Ownership structure and voting on anti-takeover amendments Journal of Financial Economics, Vol. 20, 1988, pp. 267 91.
11. Brickley, J. A., Coles, J. L. and Jarrell, G. Leadership structure: separating the CEO and CHA of the board Journal of Corporate Finance, Vol. 3, 1997, pp. 189 220.
12. Brown, N. and Deegan, C. The public disclosure of environmental performance information - a dual test of media agenda setting theory and legitimacy theory Accounting and Business Research, Vol. 29, 1998, pp. 21 41.
13. Bryan, S. H. Incremental information content of required disclosures contained in management discussion and analysis The Accounting Review, Vol. 72, 1997, pp. 285 301.
14. Cadbury Committee, Report of the Committee on the Financial Aspects of Corporate Governance (London : Gee, 1992).
15. Cadbury Committee Working Group on Going-concern, Going-concern and Financial Reporting: Guidance for Directors of Listed Companies Registered in the UK (London : Gee, 1994).
16. Chow, C. W. and Wong-Boren, A. Voluntary financial disclosure by Mexican corporations The Accounting Review, Vol. 62, 1987, pp. 533 41.
17. Citron, D. B. and Taffler, R. J. Ethical behaviour in the UK audit profession: the case of the self-fulfilling prophecy under going-concern uncertainties Journal of Business Ethics, Vol. 29, 2001, pp. 353 63.
18. Cohen, J., Krishnamoorthy, G. and Wright, A. M. Corporate governance and the audit process Contemporary Accounting Research, Vol. 19, 2002, pp. 573 94.
19. Dahya, J. and Travlos, N. G. Does the one man show pay? Theory and evidence on the dual CEO revisited European Financial Management, Vol. 6, 2000, pp. 85 98.
20. Dahya, J., McConnell, J. J. and Travlos, N. G. The Cadbury Committee, corporate performance and top management turnover Journal of Finance, Vol. 57, 2002, pp. 461 83.
21. DeJong, D. Class-action privileges and contingent legal fees: investor and lawyer incentives to litigate and the effect on audit quality Journal of Accounting and Public Policy, Vol. 4, 1985, pp. 175 200.
22. Frazier, K. B., Ingram, R. W. and Tennyson, B. M. A methodology for the analysis of narrative accounting disclosures Journal of Accounting Research, Vol. 22, Spring 1984, pp. 318 31.
23. Freedman, M. and Stagliano, A. J. Disclosure of environmental cleaning costs: the impact of the Superfund Act Advances in Public Interest Accounting, Vol. 6, 1995, pp. 163 76.
24. Frost, C. A. Disclosure policy choices of UK firms receiving modified audit reports Journal of Accounting and Economics, Vol. 23, 1997, pp. 163 87.
25. Gaved, M., Closing the Communication Gap: Disclosure and Institutional Shareholders (London : ICAEW, 1997).
26. Gujarati, D., Basic Econometrics, 4th ed New York : McGraw-Hill, 2003).
27. Haried, A. A. The semantic dimensions of financial statements Journal of Accounting Research, Vol. 10, Autumn 1972, pp. 376 91.
28. Healy, P. M. and Palepu, K. G. Information asymmetry, corporate disclosure, and the capital markets: a review of the empirical disclosure literature Journal of Accounting and Economics, Vol. 31, 2001, pp. 405 40.
29. Hillier, D., Linn, S. C. and McColgan, P. Equity issuance, CEO turnover and corporate governance European Financial Management, Vol. 11, 2005, pp. 515 38.
30. Hockey, S., Micro-OCP (Oxford Concordance Program) (Oxford : Oxford University Press, 1994).
31. Ingram, R. W. and Frazier, K. B. Environmental performance and corporate disclosure Journal of Accounting Research, Vol. 18, Autumn 1980, pp. 614 22.
32. Jensen, M. Active investors, LBOs and privatization of bankruptcy Journal of Applied Corporate Finance, Vol. 2, 1989, pp. 35 44.
33. Jensen, M. The modern industrial revolution, exit and the failure of the internal corporate governance systems Journal of Finance, Vol. 48, 1993, pp. 831 80.
34. Jones, M. J. and Shoemaker, P. A. Accounting narratives: a review of empirical studies of content and readability Journal of Accounting Literature, Vol. 13, 1994, pp. 142 84.
35. Kasznik, R. and Lev, B. To warn or not to warn: management disclosures in the face of an earnings surprise The Accounting Review, Vol. 70, 1995, pp. 113 34.
36. Kelly-Newton, L. A sociological investigation of the U.S.A. mandate for replacement cost disclosures Accounting Organizations and Society, Vol. 5, 1980, pp. 311 22.
37. Kennedy, D. B. and Shaw, W. H. Evaluating financial distress resolution using prior audit opinions Contemporary Accounting Research, Vol. 8, 1991, pp. 97 114.
38. Klein, A. Audit committee, board of director characteristics and earnings management Journal of Accounting & Economics, Vol. 33, 2002, pp. 375 400.
39. Kothari, S. P., Shu, S. and Wysocki, P. Do managers withhold bad news? Working Paper (Sloan School of Management, 2005).
40. Krippendorff, K., Content Analysis (London : Sage, 1980).
41. Lai, J. and Sudarsanam, P. S. Corporate restructuring in response to performance decline: impact of ownership, governance and lenders European Finance Review, Vol. 1, 1997, pp. 197 233.
42. McConnell, J. J. and Servaes, H. Additional evidence on equity ownership and corporate value Journal of Financial Economics, Vol. 27, 1990, pp. 595 612.
43. Meek, G. K., Roberts, C. B. and Gray, S. J. Factors influencing voluntary annual report disclosures by US, UK and continental European multinational corporations Journal of International Business Studies, Vol. 26, 1995, pp. 555 72.
44. Melumad, N. and Thoman, L. On auditors and the courts in an adverse selection setting Journal of Accounting Research, Vol. 28, Spring 1990, pp. 771 82.
45. Mutchler, J. F., Hopwood, W. and McKeown, J. M. The influence of contrary information and mitigating factors on audit opinion decisions on bankrupt companies Journal of Accounting Research, Vol. 35, Autumn 1997, pp. 295 310.
46. Narayanan, V. An analysis of auditor liability rules Journal of Accounting Research, Vol. 32, Supplement 1994, pp. 39 64.
47. Nelson, J., Ronen, J. and White, L. Legal liabilities and the market for auditing services Journal of Accounting, Auditing and Finance, Vol. 3, 1988, pp. 255 95.
48. Ofek, E. Capital structure and firm response to poor performance: an empirical analysis Journal of Financial Economics, Vol. 34, 1993, pp. 3 30.
49. Pomeranz, F. Corporate governance: opportunity for institutions Journal of Investing, Vol. 7, 1998, pp. 25 29.
50. Pound, J. Proxy content and the efficiency of shareholder oversight Journal of Financial Economics, Vol. 20, 1988, pp. 237 65.
51. Shores, D. The association between interim information and security returns surrounding earnings announcements Journal of Accounting Research, Vol. 28, Spring 1990, pp. 164 81.
52. Skinner, D. J. Why firms voluntarily disclose bad news Journal of Accounting Research, Vol. 32, 1994, pp. 38 60.
53. Skinner, D. J. Earnings disclosures and stockholder lawsuits Journal of Accounting and Economics, Vol. 23, 1997, pp. 249 82.
54. Smith, G. M. and Taffler, R. J. The incremental effect of narrative accounting information in corporate annual reports Journal of Business Finance and Accounting, Vol. 22, 1995, pp. 1195 1210.
55. Taffler, R. J. Empirical models for the monitoring of UK corporations Journal of Banking and Finance, Vol. 8, 1984, pp. 199 227.
56. Tennyson, B. M., Ingram, R. W. and Dugan, M. T. Assessing the information content of narrative disclosures in explaining bankruptcy Journal of Business Finance and Accounting, Vol. 17, 1990, pp. 391 410.
57. Weber, R. P., Basic Content Analysis, 2nd ed London : Sage, 1990).
58. Yermack, D. Higher market valuation of companies with a small board of directors Journal of Financial Economics, Vol. 40, 1996, pp. 185 211.