The Relation Between the New Corporate Governance Rules and the Likelihood of Financial Statement Fraud

Review of Accounting and Finance

Volumn 4, Issue 2, 2005, Pages 125-148

  Persons, Obeua S ^a  

^a RIDER UNIVERSITY   (United States)

Author keywords

audit committee; board of directors; corporate governance; Fraud; nominating committee; Sarbanes Oxley Act

Indexed keywords

EID: 84993099006     PISSN: 14757702     EISSN: 17587700     Source Type: Journal    
DOI: 10.1108/eb043426     Document Type: Review

References (44)

1. Abbott L.J., Parker S. and Peters G.F. 2002 Audit committee characteristics and financial misstatement: A study of the efficacy of certain Blue Ribbon Committee recommendations. Working paper, University of Memphis, Santa Clara University and University of Georgia.
2. Beasley M.S. 1996. An empirical analysis of the relation between the board of director composition and financial statementfraud. The Accounting Review 71 (October): 443-465.
3. Buckby S., Dunstan K.L. and Savage R. 2002. A study of the determinants of Australia audit committee effectiveness. Working paper, Queensland University of Technology.
4. Burns J. 2003. Everything you wanted to know about corporate governance. Wall Street Journal Online October 27.
5. Carcello J.V. and Neal T.L. 2000. Audit committee composition and auditor reporting. The Accounting Review 75:453-468.
6. Carcello J.V. and Neal T.L. 2003. Audit committee characteristics and auditor dismissals following ‘new’ going-concern reports. The Accounting Review 78 (January): 95-118.
7. Conger J., Finegold A. and Lawler E. III. 1998. Appraising boardroom performance. Harvard Business Review 76: 136-148.
8. Craig S. and Kelly K. 2003. Reed nears NYSE board overhaul. Wall Street Journal Online October 29.
9. Daboub A., Rasheed A, Priem R. and Gray D. 1995. Top management team characteristics and corporate illegal activity. Academy of Management Review 20 (January): 138-170.
10. Dechow P.M., Sloan R.G. and Sweeney A.P. 1996. Causes and consequences of earnings manipulation: An analysis of firms subject to enforcement actions by the SEC. Contemporary Accounting Research 13 (Spring): 1-36.
11. Denis D. and Serrano J. 1996. Active investors and management turnover following unsuccessful control contests. Journal of Financial Economics 40: 239-266.
12. Duke, J. and Hunt H. III. 1990. An empirical examination of debt covenant restrictions and accounting-related debt proxies. Journal of Accounting and Economics 12 (January): 45-63.
13. Fama E.F. 1980. Agency problem and the theory of the firm. Journal of Political Economy 88: 288-308.
14. Fama E.F. and Jensen M.C. 1983. Separation of ownership and control. Journal of Law and Economics 26 (June): 301-325.
15. Felo A.J., Krishnamurthy S. and Solieri S.A. 2003. Audit committee characteristics and the perceived quality of financial reporting: An Empirical Analysis. Working Paper, Pennsylvania State University, State University of New York at Binghamton and University of Scranton.
16. Grossman S.J. and Hart O.D. 1980. Takeover bids, the free-rider problem, and the theory of the corporation. The Bell Journal of Economics 2 (Spring): 42-64.
17. Hermalin B. and Weisbach M.S. 1988. The determinants of board composition. The Rand Journal of Economics 19 (Winter); 589-606.
18. Hill W. and Phan P. 1991. CEO tenure as a determinant of CEO pay. Academy of Management Journal 34 (3): 707-717.
19. Jensen M. 1993. The modern industrial revolution, exit, and failure of internal control systems. Journal of Finance 48 (July): 831-880.
20. Joseph G.P. 2002. Corporate Fraud Act. National Law Journal. 24 (August 5): B9. Karpoff J.M. and Lott J.R. 1993. The reputational penalty firms bear from committing criminal fraud. Journal of Law and Economics 36 (October): 757-802.
21. Kellogg I. and Kellogg L.B. 1991. Fraud, window dressing, and negligence in financial statements. Commercial Law Series, New York: McGraw-Hill.
22. Klein A. 1998. Firm performance and board committee structure. The Journal of Law and Economics 41: 275-303.
23. Klein A. 2002a. Audit committee, board of director characteristics, and earnings management. Journal of Accounting and Economics 33: 375-400.
24. Klein A. 2002b. Economic determinants of audit committee independence. The Accounting Review 77 (April): 435-452.
25. Kosnik R.D. 1987. Greemail: A study of board performance in corporate governance. Administrative Science Quarterly 32: 163-185.
26. Mace M.L. 1986. Directors: Myth and Reality. Boston, MA: Harvard Business School Press.
27. Maddala G.S. 1991. A perspective on the use of limited-dependent and qualitative variables models in accounting research. The Accounting Review 66 (October): 788-807.
28. Maksimovic V. and Titman S. 1991. Financial policy and reputation for product quality. Review of Financial Studies 4: 175-200.
29. Menon K. and Williams J.D. 1994. The use of audit committee for monitoring. Journal of Accounting and Public Policy 13 (Spring): 121-139.
30. Moore J.D. 2002. US Congress carries anti-fraud effort abroad. International Financial Law Review 21 (September): 18-20
31. Morck R, Shleifer A and Vishny R.W. 1988. Management ownership and market valuation: An empirical analysis. Journal of Financial Economics 20: 293-315.
32. Opler, T. and Titman S. 2001. The debt-equity choices. Journal of Financial and Quantitative Analysis 36 (March): 1-24.
33. Palepu K. 1986. Predicting takeover targets: A methodological and empirical analysis. Journal of Accounting and Economics 8 (March): 3-35.
34. Patton A. and Baker J. 1987. Why do not directors rock the boat? Harvard Business Review 65 (November): 10-12.
35. Press, E. and Weintrop J. 1990. Accounting-based constraints in public and private debt agreements: Their association with leverage and impact on accounting choice. Journal of Accounting and Economics 12 (January): 65-95.
36. Rosenstein S. and Wyatt J.G. 1990. Outside directors, board independence, and shareholder wealth. Journal of Financial Economics 26: 175-191.
37. Shivdasani A. 1993. Board composition, ownership structure, and hostile takeovers. Journal of Accounting and Economics 16: 167-198.
38. Shivdasani A. and Yermack D. 1999. CEO involvement in the selection of new board members: An empirical analysis. Journal of Finance 54: 1829-1853.
39. Shleifer A. and Vishny R.W. 1997. A survey of corporate governance. Journal of Finance 52 (June): 737-783.
40. Solomon D. 2003. Reed plans to revamp NYSE board. Wall Street Journal Online; October 17.
41. Steiner, I.D. 1972. Group Process and Productivity. New York, NY: Academic Press.
42. Stone M. and Rasp J. 1991. Tradeoffs in the choice between Logit and OLS for accounting choice studies. The Accounting Review 66 (January): 170-187.
43. Williamson M.S. 1984. Corporate governance. The Yale Law Journal 93: 1197-1230.
44. Xie B., Davidson W.N. and Dadalt P.J. 2004. Earnings management and corporate governance: The roles of the board and the audit committee. Journal of Corporate Finance, Forthcoming.