An Empirical Analysis of the Effects of Accounting Expertise in Audit Committees on Non-GAAP Earnings Exclusions

Autor:	Sanjian Bill Zhang, Ananth Seetharaman, Xu (Frank) Wang
Rok vydání:	2013
Předmět:	Actuarial science Earnings business.industry Audit committee Audit evidence Chief audit executive Accounting Accounting standard Joint audit Stock exchange Financial information Information technology audit Business
Zdroj:	Accounting Horizons. 28:17-37
ISSN:	1558-7975 0888-7993
Popis:	SYNOPSIS U.S. stock exchanges and lawmakers rely on audit committees to help safeguard the accuracy and reliability of corporate GAAP and non-GAAP financial information. However, there are gaps in our knowledge of how audit committees perform, especially with respect to companies' non-GAAP financial information. Unlike companies' GAAP-based financial measures, non-GAAP numbers are voluntary, not well defined, and unaudited. Non-GAAP measures thus provide a particularly rich setting to examine the efficacy of audit committee performance. In this study we examine the association between audit committee appointments of accounting experts (relative to appointments of nonaccounting experts) and the company's non-GAAP earnings numbers. We find a larger decline in non-GAAP earnings exclusions following the appointment of accounting (rather than nonaccounting) experts to audit committees. We also find that accounting experts are associated with higher-quality post-appointment non-GAAP earnings exclusions. JEL Classifications: M4; G30. Data Availability: Data are available from the sources indicated in the paper.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_dedup___::edf747440445f6e2dcf925d6a44978fe https://doi.org/10.2308/acch-50584 Zobrazit plný text záznamu