Details

Autor(en) / Beteiligte

• Wang, Zhi
• Chen, Mei-Hui
• Chin, Chen Lung
• Zheng, Qi

Titel

Managerial ability, political connections, and fraudulent financial reporting in China

Ist Teil von

• Journal of accounting and public policy, 2017-03, Vol.36 (2), p.141-162

Ort / Verlag

New York: Elsevier Inc

Erscheinungsjahr

2017

Quelle

PAIS Index

Beschreibungen/Notizen

• The primary objective of this paper is to examine the associations among managerial ability, political connections and enforcement actions for financial reporting misrepresentation (hereafter financial reporting fraud) in China. Using a sample of listed firms in China during 2007–2012, we first find that increased managerial ability leads to less financial reporting fraud. Second, political connections of firms can weaken or limit the effect of managerial ability on the likelihood of financial statement fraud. Further analyses indicate that the results are primarily driven by non-state-owned firms, rather than state-owned firms. Finally, we further find that firms with capable managers face less severe penalties by the regulatory agencies relative to those without capable managers.