The spillover effects of accounting scandals in business groups

IF 3.3 3区 管理学 Q1 BUSINESS, FINANCE
Guilong Cai , Rui Ge , Jeffrey Pittman , Leon Zolotoy
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引用次数: 0

Abstract

We show that the revelation of an accounting scandal in a member firm induces stock price declines among other member firms in the same business group. Additional evidence suggests that the spillover effects of accounting scandals are amplified when peer member firms exhibit wider deviation between the ultimate controller’s voting rights and cash flow rights, demonstrate worse accounting transparency, participate more intensively in related party transactions, and appoint more connected audit partners. Further, we find that the spillover effects subside when the peer member firms engage Big Four auditors. We also document that peer member firms that are later identified as committing accounting fraud suffer sharper stock price declines around the revelation of the initial accounting scandal in the business group. Collectively, our evidence implies that an accounting scandal at a member firm undermines the market values of peer member firms by triggering investors’ concerns about accounting fraud risk for these firms.
企业集团会计丑闻的溢出效应
我们的研究表明,一家成员公司的会计丑闻曝光会导致同一企业集团中其他成员公司的股价下跌。其他证据表明,如果同行成员公司的最终控制人投票权与现金流权之间的偏差更大、会计透明度更差、关联方交易参与更频繁、任命的审计合伙人关系更密切,那么会计丑闻的溢出效应就会放大。此外,我们还发现,当同行成员公司聘用四大审计师时,溢出效应会减弱。我们还发现,后来被认定存在会计欺诈行为的同行成员公司,其股价在该企业集团最初的会计丑闻曝光前后会出现更大幅度的下跌。总之,我们的证据表明,成员公司的会计丑闻会引发投资者对同行成员公司会计欺诈风险的担忧,从而损害这些公司的市场价值。
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来源期刊
CiteScore
4.80
自引率
2.80%
发文量
75
期刊介绍: The Journal of Accounting and Public Policy publishes research papers focusing on the intersection between accounting and public policy. Preference is given to papers illuminating through theoretical or empirical analysis, the effects of accounting on public policy and vice-versa. Subjects treated in this journal include the interface of accounting with economics, political science, sociology, or law. The Journal includes a section entitled Accounting Letters. This section publishes short research articles that should not exceed approximately 3,000 words. The objective of this section is to facilitate the rapid dissemination of important accounting research. Accordingly, articles submitted to this section will be reviewed within fours weeks of receipt, revisions will be limited to one, and publication will occur within four months of acceptance.
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