Corporate law holds boards of directors responsible for the financial reporting process. This raises the possibility that boards will constrain earnings management activity. This paper tests for evidence of an empirical association between board effectiveness and earnings management, as proxied...

This paper examines whether the incidence of earnings management in the UK depends on board monitoring. We focus on two aspects of board monitoring: the role of outside board members and the audit committee. Results indicate that the likelihood of managers making income-increasing abnormal...

We use the residual income valuation framework to compare the equity valuation implications of four approaches to employee stock options (ESOs) accounting proposed by regulators: APB 25 quot;recognize nothingquot;, SFAS 123 preferred quot;recognize ESO expensequot;, FASB Exposure Draft...

This paper investigates the relationship between managerial equity ownership and the demand for outside directors in the U.K. corporate control process. In recognition of both the benefits (incentive-alignment effects) and costs (entrenchment effects) of managerial ownership, we propose and test...

This paper examines the association between the composition of the board of directors and earnings management activity for a period spanning the publication of the Cadbury Report (1992). Central to both the Cadbury Committee?s initial remit and its subsequent recommendations is the view that...

Corporate law defines an explicit responsibility for boards of directors in the financial reporting process. In so doing it raises the expectation that boards will constrain earnings management activity. This paper tests for evidence of an empirical association between the composition of the...

New U.K. pension accounting regulations significantly increase the exposure of the balance sheets of U.K. firms to volatilities in pension fund valuations. We examine whether the abnormal returns of firms that voluntarily used market-based pension discount rates are significantly different from...