Consequences of Financial Reporting Failure for Outside Directors

Kheirollahi, Farshid; Eivani, Farzad; Mohebi, Ehsan

doi:10.22054/qjma.2018.8781

Document Type : Research Paper

Authors

¹ Assistant Professor of Accounting, Razi University, Kermanshah, Iran

² Instructor of Accounting, Razi University, Kermanshah, Iran

³ Ph. D. Student of Accounting, Tabataba’i University,Tehran, Iran

https://doi.org/10.22054/qjma.2018.8781

Abstract

Issues and problems associated with financial statements have raised ambiguities about the role and responsibilities of the board of directors as well as the audit committee in financial reporting. Accounting restatements indicates that the financial statements of the past periods are unlikely to be presented in accordance with the generally accepted accounting principles. In addition, the Accounting Restatements may indicate weakness in the firm's internal control system. An efficient director labor market wills likely reward directors who have a reputation for effectiveness with additional board positions and associated benefits, and penalize the poor performers by loss of their positions and benefits. In the present study, the consequences of financial statements as a reporting failure for non-executive directors with an emphasis on the audit committee are examined. For this purpose, 43 listed firms were selected as the main sample and 43 listed firms as the control group during the years 2012 to 2016 from Tehran Stock Exchange. According to the results of the study, the financial restatements have not led to the imposition of labor market fines for outside director

Keywords

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Empirical Studies in Financial Accounting

Consequences of Financial Reporting Failure for Outside Directors

References

References

Volume 14, Issue 56 - Serial Number 56
January 2018
Pages 109-132

Consequences of Financial Reporting Failure for Outside Directors

References

References

Volume 14, Issue 56 - Serial Number 56January 2018Pages 109-132

Volume 14, Issue 56 - Serial Number 56
January 2018
Pages 109-132