Work

Corporate Governance, Accounting Outcomes, and Organizational Performance

Year: 2007

Type: article

Abstract: The empirical research examining the association between typical measures of corporate governance and various accounting and economic outcomes has not produced a consistent set of results. We believe that these mixed results are partially attributable to the difficulty in generating reliable and valid measures for the complex construct that is termed “corporate governance.” Using a sample of 2,106 firms and 39 structural measures of corporate governance (e.g., board characteristics, stock ownership, institutional ownership, activist stock ownership, existence of debtholders, mix of executive compensation, and anti-takeover variables), our exploratory principal component analysis suggests that there are 14 dimensions to corporate governance. We find that these indices have a mixed association with abnormal accruals, little relation to accounting restatements, but some ability to explain future operating performance and future excess stock returns.

Source: The Accounting Review

DOI: 10.2308/accr.2007.82.4.963

Authors: David F. Larcker, Scott A. Richardson, I˙rem Tuna

Institutions: Stanford University, Barclays (United Kingdom), London Business School, University of Pennsylvania

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2097764282

FWCI: 166.2

Cites: 70

Cited by: 1,538

Related to: 10