IDEAS home Printed from https://ideas.repec.org/a/bla/jbfnac/v52y2025i4p1735-1761.html
   My bibliography  Save this article

Regulatory Cooperation, Enforcement, and Accounting Restatements of US‐Listed Foreign Firms

Author

Listed:
  • Yuyuan Chang
  • Wen He

Abstract

Srinivasan et al. document evidence that foreign firms listed in the United States report fewer accounting restatements than US domestic firms. Using a regulatory change and a novel statistical method, we provide evidence suggesting that the evidence is driven by foreign firms systematically underreporting misstatements. Specifically, after their home countries join the Multilateral Memorandum of Understanding (MMoU) network that facilitates cross‐border regulatory enforcement, US‐listed foreign firms are less likely to commit misstatements but are more likely to report their misstatements. Furthermore, foreign firms’ restatements have a stronger association with measures of earnings management and receive less negative market reactions in the post‐MMoU period. The results suggest that stronger regulatory enforcement deters underreporting of restatements and makes foreign firms’ financial reporting more similar to that of US domestic firms.

Suggested Citation

  • Yuyuan Chang & Wen He, 2025. "Regulatory Cooperation, Enforcement, and Accounting Restatements of US‐Listed Foreign Firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 52(4), pages 1735-1761, August.
  • Handle: RePEc:bla:jbfnac:v:52:y:2025:i:4:p:1735-1761
    DOI: 10.1111/jbfa.12866
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/jbfa.12866
    Download Restriction: no

    File URL: https://libkey.io/10.1111/jbfa.12866?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jbfnac:v:52:y:2025:i:4:p:1735-1761. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.