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Essays on Audit Committee Interlocks and Financial Reporting Quality.

Record Type:	Language materials, manuscript : Monograph/item
Title/Author:	Essays on Audit Committee Interlocks and Financial Reporting Quality./
Author:	Orimoloye, Yetunde H.
Description:	1 online resource (191 pages)
Notes:	Source: Dissertations Abstracts International, Volume: 84-11, Section: A.
Contained By:	Dissertations Abstracts International84-11A.
Subject:	Finance. -
Online resource:	click for full text (PQDT)
ISBN:	9798379497880

Essays on Audit Committee Interlocks and Financial Reporting Quality.
Orimoloye, Yetunde H.

Essays on Audit Committee Interlocks and Financial Reporting Quality. - 1 online resource (191 pages)

Source: Dissertations Abstracts International, Volume: 84-11, Section: A.

Thesis (Ph.D.)--Morgan State University, 2023.

Includes bibliographical references

The audit committee is crucial in overseeing the firm's financial reporting process, including internal control over financial reporting, and external auditors. Early studies on the audit committee's role have focused on the members' composition and independence. However, the issue of audit committee interlocks, where audit committee directors serve on more than one audit committee, has garnered the attention of corporate governance researchers in recent years. The shift to a fully independent committee, which began as a "good corporate governance" mandate, has given rise to a trend toward audit committee interlocks. Audit committee interlocks represent a low-cost channel for disseminating practices, good or bad, across firms in the network. Despite the preponderance of studies on general board interlocks, research on the nature of audit committee interlocks and the implications for audit committee effectiveness and financial reporting quality is relatively scant. Thus, I investigate whether fraud spreads between audit committee interlocking firms. My dissertation consists of two essays. The first essay investigates whether a firm is likely to commit fraud in subsequent years when it shares an audit committee director during the contagious years with a fraud firm. The second essay tests whether audit committee-auditor interlocking firms are likely to be charged higher audit fees in the subsequent year after the revelation of fraud at connected firms. For the first essay, I find that firms that share audit committee directors with fraud firms are more likely to commit fraud in subsequent years. Given the prevalence of audit committee interlocks, we need more research to understand better their impact on financial reporting quality. For the second essay, I report that firms that share the same auditor and audit committee director with a fraud firm pay higher audit fees in the first year after the revelation of fraud. Finally, I document an average marginal increase of 32.84% in audit fees in the first year after the revelation of fraud. Also, I document that the observed audit fees increase persists up to two years after the disclosure of fraud.

Electronic reproduction.
Ann Arbor, Mich. :
ProQuest,
2024

Mode of access: World Wide Web

ISBN: 9798379497880Subjects--Topical Terms:

559073
Finance.
Subjects--Index Terms:

Audit committee interlocksIndex Terms--Genre/Form:

554714
Electronic books.

Essays on Audit Committee Interlocks and Financial Reporting Quality.
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504 $a Includes bibliographical references
520 $a The audit committee is crucial in overseeing the firm's financial reporting process, including internal control over financial reporting, and external auditors. Early studies on the audit committee's role have focused on the members' composition and independence. However, the issue of audit committee interlocks, where audit committee directors serve on more than one audit committee, has garnered the attention of corporate governance researchers in recent years. The shift to a fully independent committee, which began as a "good corporate governance" mandate, has given rise to a trend toward audit committee interlocks. Audit committee interlocks represent a low-cost channel for disseminating practices, good or bad, across firms in the network. Despite the preponderance of studies on general board interlocks, research on the nature of audit committee interlocks and the implications for audit committee effectiveness and financial reporting quality is relatively scant. Thus, I investigate whether fraud spreads between audit committee interlocking firms. My dissertation consists of two essays. The first essay investigates whether a firm is likely to commit fraud in subsequent years when it shares an audit committee director during the contagious years with a fraud firm. The second essay tests whether audit committee-auditor interlocking firms are likely to be charged higher audit fees in the subsequent year after the revelation of fraud at connected firms. For the first essay, I find that firms that share audit committee directors with fraud firms are more likely to commit fraud in subsequent years. Given the prevalence of audit committee interlocks, we need more research to understand better their impact on financial reporting quality. For the second essay, I report that firms that share the same auditor and audit committee director with a fraud firm pay higher audit fees in the first year after the revelation of fraud. Finally, I document an average marginal increase of 32.84% in audit fees in the first year after the revelation of fraud. Also, I document that the observed audit fees increase persists up to two years after the disclosure of fraud.
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653 $a Audit committee-auditor interlocks
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653 $a Financial reporting fraud
653 $a Reputational penalties
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