This paper investigates the moderating role of industry regulation on the effectiveness of audit committees in restricting earnings management. Using comprehensive panel data of S&P 1500 firms between 2003 and 2007, we find that the proportion of CEO directors on an audit committee is positively...

Using private benefits of control and earnings management data from 41 countries and regions, we provide strong evidence that cultures, together with legal rules and law enforcement, play a critical role in shaping corporate behavior. More specifically, we find that private benefits of control...