Can Anglo-Saxon audit committee scheme improve earnings quality in non-Anglo-Saxon environments?. Issue 1 (April 2015)

• Record Type: Journal Article
• Authors: Chen, Jengfang; Duh, Rong-Ruey; Hsu, Audrey Wen-Hsin; Pan, Chien-Min
• Is Part Of: Journal of contemporary accounting & economics. Volume 11:Issue 1(2015:Apr.)
• Page Start: 61
• Page End: 74
• Publication Date: 2015-04
• Subjects: Accounting -- Periodicals; Accounting -- Research -- Periodicals; Accounting -- Periodicals; Accounting; Accounting -- Research; Periodicals; 657.05
• DOI: 10.1016/j.jcae.2014.12.004
• Languages: English
• ISSNs: 1815-5669

Abstract

<abstract abstract-type="author" id="ab0010"> <title id="st0010">Abstract</title> <sec> <p id="sp0010">Inspired by the debate about globally uniform governance standards on setting up an Anglo-Saxon model of audit committee, this study investigates whether firms adopting audit committee system vis-à-vis a local governance scheme can improve earnings quality. We exploit a unique setting in Japan where firms are allowed to switch to the audit committee from the statutory auditor board under the conventional two-tier structure. We find that improvements in earnings quality cannot be achieved by merely adopting the audit committee but are reaped by firms that converge to the audit committee with substance. Our results indicate that many Japanese firms may adopt audit committee as a fashionable "label" without embracing shareholder primacy.</p> </sec> </abstract>