Corporate governance, growth opportunities, and earnings restatements: Effects of a corporate governance code

Ken Y. Chen, Randal J. Elder, Yung Ming Hsieh

Research output: Contribution to journalArticle

7 Scopus citations

Abstract

The study first examines whether firms that adopted the corporate governance mechanisms mandated by the newly enacted Corporate Governance Code in Taiwan are associated with lower incidence of earnings restatements. We find that firms with independent directors (supervisors) are associated with lower incidence of earnings restatements. We further examine this research question in a growth opportunity setting, a prevailing environmental feature in this emerging market, and find that high-growth firms having independent directors (supervisors) with financial expertise are associated with lower incidence of earnings restatements, suggesting that financial expertise of independent directors (supervisors) is important in the financial reporting function in high-growth firms.

Original languageEnglish (US)
Pages (from-to)169-200
Number of pages32
JournalAsia-Pacific Journal of Accounting and Economics
Volume18
Issue number2
DOIs
StatePublished - Aug 2011

Keywords

  • CEO duality
  • Corporate governance
  • Earnings restatement
  • Financial expertise
  • Supervisor

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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