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Is it a matter of governance or judicial favoritism? Legal expertise at an executive level and its use in cases of corporate financial fraud

Author

Listed:
  • Nie, Yingzhi
  • Na, Yanhua
  • Chen, Peng

Abstract

This study examines how executives’ legal expertise affects corporate financial fraud and the mechanism behind this using data from A-listed companies between 2011 and 2021. Findings show a positive correlation between executives’ legal backgrounds and corporate financial fraud, which is mainly driven by external audit quality and corporate social responsibility. This finding provides evidence of how the law affects small-scale corporate governance. This study emphasizes the value of firms leveraging their executives’ legal background, which helps regulators identify potential hazards in corporations.

Suggested Citation

  • Nie, Yingzhi & Na, Yanhua & Chen, Peng, 2024. "Is it a matter of governance or judicial favoritism? Legal expertise at an executive level and its use in cases of corporate financial fraud," Finance Research Letters, Elsevier, vol. 67(PB).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324009188
    DOI: 10.1016/j.frl.2024.105888
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    References listed on IDEAS

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    7. Lin Liao & Guanting Chen & Dengjin Zheng, 2019. "Corporate social responsibility and financial fraud: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 59(5), pages 3133-3169, December.
    8. Xing Li & Jeong-Bon Kim & Haibin Wu & Yangxin Yu, 2021. "Corporate Social Responsibility and Financial Fraud: The Moderating Effects of Governance and Religiosity," Journal of Business Ethics, Springer, vol. 170(3), pages 557-576, May.
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    Cited by:

    1. Wen, Haiqin & Geng, Yucheng & Cui, Lipeng, 2025. "Auditors’ workload pressure and firm financial fraud," Finance Research Letters, Elsevier, vol. 86(PG).
    2. Shang, Zhaoyan & Chen, Hanwen, 2025. "Supply chain transparency and corporate financial fraud," Finance Research Letters, Elsevier, vol. 77(C).

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