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Transparency, financial accounting information, and corporate governance

Author Info

Listed author(s):
  • Robert M. Bushman
  • Abbie Smith
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    Abstract

    Audited financial statements along with supporting disclosures form the foundation of the firm-specific information set available to investors and regulators. In this article, the authors discuss economics-based research focused on the properties of accounting systems and the surrounding institutional environment important to effective governance of firms. They provide a framework for understanding the operation of accounting information in an economy, discuss a broad range of important research findings, present a conceptual framework for characterizing and measuring corporate transparency at the country level, and isolate a number of future research possibilities.

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    Article provided by Federal Reserve Bank of New York in its journal Economic Policy Review.

    Volume (Year): (2003)
    Issue (Month): Apr ()
    Pages: 65-87

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    Handle: RePEc:fip:fednep:y:2003:i:apr:p:65-87:n:v.9no.1
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    Keywords: Corporations - Accounting ; Stockholders ; Corporate governance;

    References listed on IDEAS
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    1. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    2. Jean-Jacques Laffont & Jean Tirole, 1990. "Adverse Selection and Renegotiation in Procurement," Review of Economic Studies, Oxford University Press, vol. 57(4), pages 597-625.
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    Cited by:

    1. Armstrong, Christopher S. & Balakrishnan, Karthik & Cohen, Daniel, 2012. "Corporate governance and the information environment: Evidence from state antitakeover laws," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 185-204.
    2. Guedhami, Omrane & Pittman, Jeffrey A. & Saffar, Walid, 2009. "Auditor choice in privatized firms: Empirical evidence on the role of state and foreign owners," Journal of Accounting and Economics, Elsevier, vol. 48(2-3), pages 151-171, December.
    3. Krishnamurti, Chandrasekhar & Sevic, Aleksandar & Sevic, Zeljko, 2005. "Voluntary disclosure, transparency, and market quality: Evidence from emerging market ADRs," Journal of Multinational Financial Management, Elsevier, vol. 15(4-5), pages 435-454, October.
    4. Erlane K. Ghani & Nur Azrin Mat Tarmezi, 2016. "The Effect of Corporate Disclosure Guide on Information Disclosure among Malaysian Public Listed Companies," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(9), pages 362-376, September.
    5. Aerts, Walter & Cormier, Denis & Magnan, Michel, 2008. "Corporate environmental disclosure, financial markets and the media: An international perspective," Ecological Economics, Elsevier, vol. 64(3), pages 643-659, January.
    6. Luo, Yadong, 2005. "How does globalization affect corporate governance and accountability? A perspective from MNEs," Journal of International Management, Elsevier, vol. 11(1), pages 19-41, March.
    7. Stephen Dempsey & David Harrison & Kimberly Luchtenberg & Michael Seiler, 2012. "Financial Opacity and Firm Performance: The Readability of REIT Annual Reports," The Journal of Real Estate Finance and Economics, Springer, vol. 45(2), pages 450-470, August.
    8. Frank M. Song & Li Li, 2012. "Bank Governance: Concepts and Measurements," Chapters,in: Research Handbook on International Banking and Governance, chapter 1 Edward Elgar Publishing.
    9. Chen, I-Ju, 2014. "Financial crisis and the dynamics of corporate governance: Evidence from Taiwan's listed firms," International Review of Economics & Finance, Elsevier, vol. 32(C), pages 3-28.
    10. David DeBoskey & Peter Gillett, 2013. "The impact of multi-dimensional corporate transparency on us firms’ credit ratings and cost of capital," Review of Quantitative Finance and Accounting, Springer, vol. 40(1), pages 101-134, January.
    11. Wu, Meng-Wen & Shen, Chung-Hua & Lu, Chin-Hwa, 2015. "Do more foreign strategic investors and more directors improve the earnings smoothing? The case of China," International Review of Economics & Finance, Elsevier, vol. 36(C), pages 3-16.
    12. Talpsepp, Tõnn & Rieger, Marc Oliver, 2010. "Explaining asymmetric volatility around the world," Journal of Empirical Finance, Elsevier, vol. 17(5), pages 938-956, December.
    13. Orhan Akisik, 2013. "Accounting Regulation, Financial Development, and Economic Growth," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 49(1), pages 33-67, January.
    14. Pascal Dumontier & Sonda Chtourou & Soumaya Ayedi, 2006. "La qualité de l'audit externe et les mécanismes de gouvernance des entreprises : Une étude empirique menée dans le contexte tunisien," Post-Print halshs-00548115, HAL.
    15. Chun, Hyunbae & Kim, Jung-Wook & Morck, Randall & Yeung, Bernard, 2008. "Creative destruction and firm-specific performance heterogeneity," Journal of Financial Economics, Elsevier, vol. 89(1), pages 109-135, July.
    16. Wenxia Ge & Jeong-Bon Kim, 2014. "Boards, takeover protection, and real earnings management," Review of Quantitative Finance and Accounting, Springer, vol. 43(4), pages 651-682, November.
    17. repec:eco:journ1:2017-02-40 is not listed on IDEAS
    18. Vashishtha, Rahul, 2014. "The role of bank monitoring in borrowers׳ discretionary disclosure: Evidence from covenant violations," Journal of Accounting and Economics, Elsevier, vol. 57(2), pages 176-195.
    19. Wendy Green, 2010. "The split equity reform and corporate financial transparency in China," Accounting Research Journal, Emerald Group Publishing, vol. 23(1), pages 20-48, July.
    20. Nier, Erlend & Baumann, Ursel, 2006. "Market discipline, disclosure and moral hazard in banking," Journal of Financial Intermediation, Elsevier, vol. 15(3), pages 332-361, July.
    21. repec:bbz:fcpbbr:v:11:y:2014:i:1:p:25-47 is not listed on IDEAS
    22. Huang, Paoyu & Ni, Yensen, 2017. "Board structure and stock price informativeness in terms of moving average rules," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 161-169.
    23. Bushman, Robert M., 2014. "Thoughts on financial accounting and the banking industry," Journal of Accounting and Economics, Elsevier, vol. 58(2), pages 384-395.
    24. Cormier, Denis & Martinez, Isabelle, 2006. "The association between management earnings forecasts, earnings management, and stock market valuation: Evidence from French IPOs," The International Journal of Accounting, Elsevier, vol. 41(3), pages 209-236.

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