External Corporate Governance and Misreporting

William R. Baber, Sok Hyon Kang, Lihong Liang, Zinan Zhu

Research output: Contribution to journalArticlepeer-review

23 Scopus citations


This study investigates how external corporate governance provisions, specifically statutory and corporate charter provisions that limit direct shareholder participation in the governance process, affect the likelihood of an accounting restatement. The analysis indicates that strong external governance (fewer restrictions on shareholder participation) is associated with a relatively low incidence of accounting restatements. The effect of external governance is incremental to that of internal governance, which is considered as provisions that foster effective board oversight of management. Such evidence supports the premise that shareholder participation improves financial reporting quality.

Original languageEnglish (US)
Pages (from-to)1413-1442
Number of pages30
JournalContemporary Accounting Research
Issue number4
StatePublished - Dec 1 2015

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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