Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5092890 | Journal of Contemporary Accounting & Economics | 2015 | 14 Pages |
Abstract
Inspired by the debate about globally uniform governance standards on setting up an Anglo-Saxon model of audit committee, this study investigates whether firms adopting audit committee system vis-Ã -vis a local governance scheme can improve earnings quality. We exploit a unique setting in Japan where firms are allowed to switch to the audit committee from the statutory auditor board under the conventional two-tier structure. We find that improvements in earnings quality cannot be achieved by merely adopting the audit committee but are reaped by firms that converge to the audit committee with substance. Our results indicate that many Japanese firms may adopt audit committee as a fashionable “label” without embracing shareholder primacy.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Business, Management and Accounting (General)
Authors
Jengfang Chen, Rong-Ruey Duh, Audrey Wen-Hsin Hsu, Chien-Min Pan,