Innate and discretionary accruals quality and corporate governanceAccounting and finance (2009)
AbstractThis paper extends previous research on the association between corporate governance mechanisms and accruals quality. We derive measures of the discretionary and innate components of accruals quality and regress them against corporate governance characteristics. For discretionary accruals, we find use of a Big 4 audit firm and a larger audit committee as the primary governance mechanisms associated with higher accruals quality. For innate accruals quality, we find that higher quality is associated with an independent board of directors, a larger, more independent and more active audit committee, and use of a Big 4 audit firm. Our findings suggest a stronger relation between sound governance mechanisms and innate accruals quality than discretionary accruals quality.
- accruals quality,
- corporate governance
Citation InformationPamela Kent, James Routledge and Jenny Stewart. "Innate and discretionary accruals quality and corporate governance" Accounting and finance Vol. 50 Iss. 1 (2009)
Available at: http://works.bepress.com/james_routledge/10/