Publication Type
Journal Article
Version
publishedVersion
Publication Date
6-2022
Abstract
We examine the relationship between active independent directors and earnings quality for U.S. firms. We construct measures that proxy for activeness of independent directors and find that the proportion of active independent directors is under half on average. Our finding shows that earnings quality increases with the percentage of active independent directors on the board. Once the active independent directors are separated out, the other independent directors do not have any effect on earnings quality. This finding supports the hypothesis that the activeness of independent directors is incrementally significant over just the proportion of independent directors for the quality of reported earnings.
Keywords
Active independent directors, earnings quality, corporate governance
Discipline
Accounting | Corporate Finance
Research Areas
Corporate Reporting and Disclosure
Publication
Theoretical Economics Letters
Volume
12
Issue
3
First Page
897
Last Page
915
ISSN
2162-2078
Identifier
10.4236/tel.2022.123048
Publisher
Scientific Research Publishing
Citation
KUSNADI, Yuanto and SRINIDHI, Bin.
Active independent directors and earnings quality. (2022). Theoretical Economics Letters. 12, (3), 897-915.
Available at: https://ink.library.smu.edu.sg/soa_research/1987
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.4236/tel.2022.123048