Purpose – This paper seeks to investigate whether executive wealth sensitivity to stock price fluctuations serves as an incentive for earnings management. Design/methodology/approach – Using a sample of 475 chief executive officers (CEOs) from 410 randomly selected Standard and Poor's (S&P)...

Purpose – The purpose of this paper is to examine the relation between earnings management behavior and the activity of both the board and audit committee. Design/methodology/approach – Different models to isolate abnormal accruals as a proxy for earnings management are applied to a sample...

Purpose – The purpose of this paper is to empirically examine the corporate governance and financial characteristics of firms under the new Sarbanes‐Oxley (SOX) accounting regime. Design/methodology/approach – The paper first compares a comprehensive set of characteristics across firms in...

Purpose – The purpose of this paper is to show the applicability of data envelopment analysis (DEA) in arriving at an unbiased account of relative performance in a set of companies, using the pharmaceutical industry as an example. Design/methodology/approach – A DEA‐based income efficiency...

Purpose – This paper aims to examine the relation between the proportion of direct investment to US total – direct and portfolio – investment abroad and their country‐specific determinants in developed and developing countries between 1997 and 2005, emphasizing the role of high‐quality...

Purpose – The purpose of this paper is to review, critique, and integrate certain trends, events, and research streams involving earnings management, fraudulent financial reporting, corporate governance and ethics. Design/methodology/approach – The paper provides a brief history of relevant...

Purpose – The Sarbanes‐Oxley Act (SOX) mandated a variety of corporate governance mechanisms to improve the transparency of financial reporting quality. This paper's aim is to investigate whether SOX's recently mandated disclosure of corporate governance structures affects the market's...

Purpose – The purpose of this paper is to examine the association between corporate governance attributes in the form of board and ownership characteristics and the remediation of internal control material weaknesses (ICMW) reported under Section 404 of the Sarbanes‐Oxley Act (SOX) of 2002....

Purpose – The purpose of this paper is to examine whether outside CEO directors sympathize with the company CEO due to their similar positions and prestige, and make decisions in favor of the company CEO. Specifically, the authors investigate how outside CEO directors serving on the...

Purpose – The purpose of this paper is to investigate the way in which CEOs are shielded or rewarded for incurring R&D expenses. Strategic expenses such as R&D yield returns over a long period of time even though GAAP requires them to be written off in the period they are incurred. Going...