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Article
The Influence of Director Stock Ownership and Board Discussion Transparency on Financial Reporting Quality
WCOB Faculty Publications
  • Jacob M. Rose
  • Cheri Mazza, Sacred Heart University
  • Carolyn S. Norman
  • Anna M. Rose
Document Type
Article
Publication Date
7-1-2013
Abstract
Seventy-two active corporate directors participate in an experiment where management insists on aggressive recognition of revenue, but the chief audit executive proposes a more conservative approach. Results indicate interactive effects of director stock ownership and the transparency of director decisions. Stock-owning directors are more likely to oppose management’s attempts to manage earnings when transparency increases. For non-stock owning directors, however, increasing transparency does not affect the likelihood that directors oppose management’s attempts to manage earnings. The current study challenges suppositions that equate director stock ownership with improved financial reporting and higher corporate governance quality, and it provides evidence that increased transparency is beneficial when director compensation plans threaten director independence.
Comments

Version posted is the author manuscript. Published in its final version as:

Rose, J.M., Mazza, C., Norman, C.S. & Rose, A.M. (2013). The influence of director stock ownership and board discussion transparency on financial reporting quality. Accounting, Organizations & Society, 38(5), 397-405.

DOI
10.1016/j.aos.2013.07.003
Citation Information
Jacob M. Rose, Cheri Mazza, Carolyn S. Norman and Anna M. Rose. "The Influence of Director Stock Ownership and Board Discussion Transparency on Financial Reporting Quality" (2013)
Available at: http://works.bepress.com/cheri_mazza/9/