Institutional directors and the quality of information: the role of directors appointed by banks
comunitat-uji-handle:10234/9
comunitat-uji-handle2:10234/8648
comunitat-uji-handle3:10234/8649
comunitat-uji-handle4:
INVESTIGACIONMetadatos
Título
Institutional directors and the quality of information: the role of directors appointed by banksFecha de publicación
2014-07Editor
Wiley-BlackwellISSN
0964-8410; 1467-8683Tipo de documento
info:eu-repo/semantics/articleVersión de la editorial
http://onlinelibrary.wiley.com/doi/10.1111/corg.12070/abstractVersión
info:eu-repo/semantics/submittedVersionPalabras clave / Materias
Resumen
Manuscript Type: Empirical
Research Question: The objective of this paper is to study the impact that directors who
represent institutional investors have on the quality of financial reporting. We focus on those
who ... [+]
Manuscript Type: Empirical
Research Question: The objective of this paper is to study the impact that directors who
represent institutional investors have on the quality of financial reporting. We focus on those
who maintain business relations with the firm on whose board they sit (pressure sensitive
directors), and analyze their influence both on Boards and Audit Committees. Additionally,
we examine the specific role of bank directors on Boards and Audit Committees and examine
their effects on the quality of information when they act as shareholders and directors.
Research Findings/Insights: Our results suggest that institutional directors are an effective
monitoring device that leads to higher quality of financial reporting and, therefore, to less
likelihood of qualified audit reports. Consistent with the relevant role of business relations
with the firm, we find that directors appointed by pressure sensitive investors, both in Boards
and Audit Committees, have a higher impact on the unqualified audit opinion. Nevertheless,
when analyzing separately, only savings banks representatives on the Board increase the
pressure to issue a clean audit opinion.
Theoretical/Academic Implications: The results confirm that Board characteristics have an
important influence on financial reporting quality, in line with the views that have been
expressed by several international bodies (e.g., FRC, 2003; OECD, 2004). The findings also
suggest that both researchers and policy makers should no longer consider institutional
investors as a whole, since directors appointed by different types of institutional investors
have various implications on the audit opinion.
Practitioner/Policy Implications: This study makes its core contribution by empirically
showing that directors appointed by different types of institutional investors have diverse
implications on the audit opinion. This evidence could be potentially helpful in providing a
basis for regulatory actions, namely those aiming to influence the structure of the Board of
directors. The results have significant implications for supervisors and regulators, whose role
in safeguarding the financial system will benefit from an understanding of how the presence of savings banks and commercial banks in non-financial firms Boards impacts audit opinion
in a bank-based system. [-]
Publicado en
Corporate Governance: An International Review, 2014, vol. 22, núm. 4Derechos de acceso
© 2014 John Wiley & Sons Ltd
"This is the pre-peer reviewed version of the following article: [PUCHETA‐MARTÍNEZ, María Consuelo; GARCÍA‐MECA, Emma. Institutional Investors on Boards and Audit Committees and Their Effects on Financial Reporting Quality. Corporate Governance: An International Review, 2014, vol. 22, no 4, p. 347-363.], which has been published in final form at [http://dx.doi.org/10.1111/corg.12070]. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving."
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info:eu-repo/semantics/openAccess
http://rightsstatements.org/vocab/InC/1.0/
info:eu-repo/semantics/openAccess
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