Work

Corporate Governance and Earnings Quality: International Evidence

Year: 2014

Type: article

Abstract: We examine the relationship between corporate governance and earnings quality worldwide. Results suggest a substitute relationship between corporate governance and earnings quality. We find that the country effect is extremely relevant in shaping this relationship. Indeed, this relation is more pronounced in developed countries, in countries with strong investor protection. Our findings are consistent with the view that poor accounting information may force firms to adopt costlier corporate governance mechanisms, in particular in environments in which they are effective. Likewise, in such environments, firms with better quality accounting information may not need to invest so much in costly governance mechanisms.

Source: Portuguese National Funding Agency for Science, Research and Technology (RCAAP Project by FCT)

Authors: Cristina Gaio, Clara C. Raposo

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

OpenAlex ID: W2182355009

FWCI: 5.667

Cites: 35

Cited by: 29

Related to: 10