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Accounting conservatism and banking expertise on board of directors

Author

Listed:
  • Tri Tri Nguyen

    (University of Brighton
    University of Economics Ho Chi Minh City)

  • Chau Minh Duong

    (University of East London
    Ho Chi Minh City Open University)

  • Nguyet Thi Minh Nguyen

    (Ho Chi Minh City Open University)

  • Hung Quang Bui

    (University of Economics Ho Chi Minh City)

Abstract

Previous studies show mixed evidence of the role of banking expertise on the board of directors on accounting conservatism. In this paper, we add to this growing literature by providing an innovative way to measure banking expertise based on life-time working history in banks of all individual directors on the board. We find that accounting conservatism is negatively affected by banking expertise on the board. Also, the results indicate that banking expertise on the board has a more pronounced impact on accounting conservatism when firms have high bankruptcy risk and when firms have high financial leverage. The evidence has some implications for boards of directors.

Suggested Citation

  • Tri Tri Nguyen & Chau Minh Duong & Nguyet Thi Minh Nguyen & Hung Quang Bui, 2020. "Accounting conservatism and banking expertise on board of directors," Review of Quantitative Finance and Accounting, Springer, vol. 55(2), pages 501-539, August.
    • Handle: RePEc:kap:rqfnac:v:55:y:2020:i:2:d:10.1007_s11156-019-00851-2
    DOI: 10.1007/s11156-019-00851-2
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    2. Wu, Junfeng & Liu, Baohua & Chang, Samuel & Chan, Kam C., 2022. "Effects of air pollution on accounting conservatism," International Review of Financial Analysis, Elsevier, vol. 84(C).

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    More about this item

    Keywords

    Accounting conservatism; Banking expertise; Boards of directors;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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