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dc.contributor.authorSrinivasan, Suraj
dc.date.accessioned2016-12-09T14:57:43Z
dc.date.issued2005
dc.identifierQuick submit: 2014-04-23T14:39:48-04:00
dc.identifier.citationSrinivasan, Suraj. "Consequences of Financial Reporting Failure for Outside Directors: Evidence from Accounting Restatements and Audit Committee Members." Journal of Accounting Research 43, no. 2 (May 2005): 291–334.en_US
dc.identifier.issn0021-8456en_US
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:29660924
dc.description.abstractI use a sample of 409 companies that restated their earnings from 1997 to 2001 to examine penalties for outside directors, particularly audit committee members, when their companies experience accounting restatements. Penalties from lawsuits and Securities and Exchange Commission (SEC) actions are limited. However, directors experience significant labor market penalties. In the three years after the restatement, director turnover is 48% for firms that restate earnings downward, 33% for a performance-matched sample, 28% for firms that restate upward, and only 18% for technical restatement firms. For firms that overstate earnings, the likelihood of director departure increases in restatement severity, particularly for audit committee directors. In addition, directors of these firms are no longer present in 25% of their positions on other boards. This loss is greater for audit committee members and for more severe restatements. A matched-sample analysis confirms this result. Overall, the evidence is consistent with outside directors, especially audit committee members, bearing reputational costs for financial reporting failure.en_US
dc.language.isoen_USen_US
dc.relation.isversionof10.1111/j.1475-679x.2005.00172.xen_US
dc.relation.isversionofhttp://onlinelibrary.wiley.com/doi/10.1111/j.1475-679x.2005.00172.x/abstracten_US
dc.relation.hasversionhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1878595en_US
dash.licenseLAA
dc.subjectoutcome or resulten_US
dc.subjectbusiness earningsen_US
dc.subjectfinancial statementsen_US
dc.subjectlawsuits and litigationen_US
dc.subjectlaboren_US
dc.subjectmarketsen_US
dc.subjectfinancial reportingen_US
dc.subjectaccounting auditsen_US
dc.subjectcosten_US
dc.subjectreputationen_US
dc.titleConsequences of Financial Reporting Failure for Outside Directors: Evidence from Accounting Restatements and Audit Committee Membersen_US
dc.typeJournal Articleen_US
dc.date.updated2014-04-23T18:39:48Z
dc.description.versionAuthor's Originalen_US
dc.rights.holderSuraj Srinivasan
dc.relation.journalJournal of Accounting Researchen_US
dash.depositing.authorSrinivasan, Suraj
dc.date.available2016-12-09T14:57:43Z
dc.identifier.doi10.1111/j.1475-679x.2005.00172.x*
dash.contributor.affiliatedSrinivasan, Suraj


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