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Financial Scandals (financial + scandal)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	66%

Selected Abstracts

Corporate Governance Codes and the Supply of Corporate Information in the UK

CORPORATE GOVERNANCE, Issue 5 2006
Lynsey Sheridan
There have been a number of changes in United Kingdom corporate governance regulation since the financial scandals of the late 1980s and early 1990s. These developments, commencing with the publication of the Cadbury Report in 1992, address "the frequency, clarity and form in which information should be provided" (Cadbury Report, 1992, p. 60). This paper examines the increased flow of corporate news announcements by UK listed companies following the introduction of corporate governance codes. Our results indicate that the introduction of the Cadbury, Greenbury and Hampel reports was accompanied by a significant increase in the number of news announcements. [source]

The Sarbanes-Oxley Act of 2002 and Market Liquidity

FINANCIAL REVIEW, Issue 3 2008
Pankaj K. Jain
G14; M41 Abstract Investors rely heavily on the trustworthiness and accuracy of corporate information to provide liquidity to the capital markets. We find that the rash of financial scandals caused a severe deterioration in market liquidity in the form of wider spreads, lower depths, and a higher adverse selection component of spreads vis-à-vis their benchmark levels. Regulatory responses including the Sarbanes-Oxley Act of 2002 (SOX) had inconsequential short-term liquidity effects but highly significant and positive long-term liquidity effects. These liquidity improvements are positively associated with the improved quality of financial reports, several firm-specific variables (e.g., size), and market factors (e.g., price, volatility, volume). [source]

Internal Audit Departments: Adoption and Characteristics in Italian Companies

INTERNATIONAL JOURNAL OF AUDITING, Issue 2 2007
Marika Arena
This article analyses the adoption and characteristics of internal audit departments in Italian companies, in the light of recent changes in the economic and political environment following the big financial scandals which occurred both in Italy and abroad. The research framework is informed by new institutional theory, driving the definition of a conceptual model. The research approach comprises two steps: first, a preliminary in-depth case study to support the research design (assessment of relevant variables and questionnaire's construction); second, an extensive survey involving 364 Italian companies, with a response rate of 63%. The article highlights an actual diffusion of internal audit structures among Italian companies. Data collected show increasing attention towards internal audit activities, resources and competencies and highlight the relevance of isomorphic pressures in influencing companies' support of internal auditing. [source]

International Regimes: The Case of Western Corporate Governance

INTERNATIONAL STUDIES REVIEW, Issue 2 2006
DAVID A. DETOMASI
Accounting and financial scandals of unprecedented scale have recently occurred in the United States, Europe, and elsewhere. Much of the cause for these scandals has been attributed to the poor corporate governance standards practiced by the offending companies, leading researchers to re-examine how corporate governance affects economic development. One topic receiving significant research attention has been whether national corporate governance systems are likely to converge, what form that convergence may take, and what barriers currently inhibit convergence. This essay argues that the tools of regime theory hold significant potential for helping to structure empirical inquiry into the process of corporate governance convergence. It then draws upon the recent experience of Western corporate governance systems to illustrate how a consensus on norms, values, and principles in the issue area of corporate governance is emerging. The essay concludes by drawing out the implications of the developing corporate governance regime for emerging market economies and the general topic of global governance. It also poses questions for continued empirical research in the area of corporate governance and international relations. [source]

Was Arthur Andersen Different?

JOURNAL OF EMPIRICAL LEGAL STUDIES, Issue 2 2004
An Empirical Examination of Major Accounting Firm Audits of Large Clients
Enron and other corporate financial scandals focused attention on the accounting industry in general and on Arthur Andersen in particular. Part of the policy response to Enron, the criminal prosecution of Andersen eliminated one of the few major audit firms capable of auditing many large public corporations. This article explores whether Andersen's performance, as measured by frequency of financial restatements, measurably differed from that of other large auditors. Financial restatements trigger significant negative market reactions and their frequency can be viewed as a measure of accounting performance. We analyze the financial restatement activity of approximately 1,000 large public firms from 1997 through 2001. After controlling for client size, region, time, and industry, we find no evidence that Andersen's performance significantly differed from that of other large accounting firms. [source]

Before There Was Enron, There Was Orange County: A Study of Local Government Financial-Oversight Committees

PUBLIC BUDGETING AND FINANCE, Issue 3 2010
DAVID S. T. MATKIN
Recent financial scandals in some of America's largest corporations have prompted popular speculation that a similar crisis may occur within the public sector and, therefore, that government and nonprofit organizations should be required to adopt financial oversight practices similar to those that are mandated of publicly-traded corporations in the Sarbanes-Oxley Act of 2002. One of those mandated practices,the use of financial-oversight committees,is already a common practice in public organizations, though little is known about its effectiveness. This study uses a national sample of local governments to examine whether financial-oversight committees improve financial control and strengthen stakeholder confidence in financial reporting. The findings provide preliminary support for the use of financial-oversight committees as an effective tool to improve financial accountability in local government. [source]