The Sensitivity of Corporate Governance Systems to the Timeliness of Accounting Earnings *

  title={The Sensitivity of Corporate Governance Systems to the Timeliness of Accounting Earnings *},
  author={Robert M. Bushman and Kenan-Flagler and Ellen Engel and Abbie J. Smith},
The purpose of this paper is to investigate how governance systems of large public U.S. corporations vary with information properties of numbers produced by their financial accounting systems. We argue that in firms whose current accounting numbers do a relatively poor job of capturing the effects of the firm’s current activities and outcomes on shareholder value, the accounting numbers are less effective in the governance setting. We predict that such firms will substitute costly governance… 

The Roles of Performance Measures and Monitoring in Annual Governance Decisions in Entrepreneurial Firms

This paper analyzes annual corporate governance decisions at firms making initial public offerings (IPOs) of common stock between 1996 and 1999. Our objective is to examine relations between firms’

Channels through Which Financial Accounting Information Affects Economic Performance

ibrant public securities markets rely on complex systems of supporting institutions that promote the governance of publicly traded companies. Corporate governance structures serve: 1) to ensure that

Incentives and Governance in Entrepreneurial Firms

This paper analyzes corporate governance decisions at firms making initial public offerings (IPOs) of common stock between 1996 and 1999. Our objective is to examine relationships between firms'

Governance Performance and Functions of Accounting Information in the Corporate Governance

  • Lu Jing
  • Business, Economics
    2006 International Conference on Management Science and Engineering
  • 2006
We discuss economics-based research focused primarily on the governance role of financial accounting information. We present a framework that isolates three channels through which financial

A Unified Analysis of Executive Pay: The Case of the Financial Sector

This study examines executive compensation determinants in the U.S. financial services sector. Multiple theories of executive pay are discussed and tested using a relatively homogenous sample. We

Industries , Investment Opportunities , and Corporate Governance Structures

We provide an argument and present evidence that industry factors play an important role in corporate governance. In particular, an industry’s investment opportunities, product uniqueness,

Ownership Concentration, Debt Financing and the Investment Opportunity Set as Determinants of Accounting Discretion: Empirical Evidence From Spain

ABSTRACT Using a sample of 783 observations, belonging to 109 firms quoted in the Spanish capital market over the period 1991–1999, our research analyses the discretion and restrictions of accounting

Explaining Corporate Governance: Boards, Bylaws, and Charter Provisions

We provide arguments and present evidence that corporate governance structures are endogenous responses to the costs and benefits firms face when they choose the mechanisms that comprise those


The synthetic lease is a hybrid financing structure that allows a company to have many of the benefits of asset ownership, including capital lease treatment for tax purposes, while treating lease

Determinants of Related Party Transactions and Their Impact on Firm Value

Recent corporate scandals have raised considerable concern among regulators and stock market participants about related party transactions (RPTs), prompting SarbanesOxley (SOX) to prohibit personal



The Effect of International Institutional Factors on Properties of Accounting Earnings

International differences in the demand for accounting income predictably affect the way it incorporates economic income (dividend-adjusted change in market value) over time. We characterize the

Ownership and Board Structures in Publicly Traded Corporations

We examine the equity ownership structure and board composition of a sample of 583 firms over the ten-year period 1983-1992. Our evidence suggests that a substantial fraction of firms exhibit large

Managerial Ownership and Firm Performance: Incentives or Rewards?

Managerial ownership of equity both aligns shareholder and management interests and places voting power in the hands of corporate decision-makers. The cross-sectional relation between management


In this paper we examine cross-sectional variation in analysts' published evaluations of firms' disclosure practices and provide evidence that the analysts' ratings are increasing in firm size and in

The Structure of Corporate Ownership: Causes and Consequences

This paper argues that the structure of corporate ownership varies systematically in ways that are consistent with value maximization. Among the variables that are empirically significant in

The Uncertain Relationship between Board Composition and Firm Performance

We survey the evidence on the relationship between board composition and firm performance. Boards of directors of American public companies that have a majority of independent directors behave

Corporate Disclosure Policy and Analyst Behavior

This paper examines the relation between the disclosure practices of firms, the number of analysts following each firm, and properties of the analysts' earnings forecasts. Using data from the

The choice of performance measures in annual bonus contracts

This paper examines the factors influencing the relative weights placed on financial and non-financial performance measures in CEO bonus contracts. We find that the use of non-financial measures