Effects of corporate governance reform on the quality of internal controls: Evidence from Japan

Hiroshi Uemura ()
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Hiroshi Uemura: School of Management, Kochi University of Technology

No SDES-2014-4, Working Papers from Kochi University of Technology, School of Economics and Management

Abstract: This study examines Japanese corporations that disclose significantdeficiencies (SDs) in internal controls and analyses whether replacing the chief executive (CEO), enhancing the independence of boards of directors, and upgrading the financial expertise of corporate boards are followed by a remediation of SDs. This study demonstrates that Japanese companies which report SDs are more likely to replace their CEOs and to increase the independence of their board of directors. In addition, it finds that replacing CEOs and increasing the board’s independence are unrelated to remediating SDs. However, upgrading the board’s accounting expertise correlates positively with remediation of SDs.

Keywords: internal controls; significant deficiencies; executive turnover; corporate governance independence; corporate governance expertise (search for similar items in EconPapers)
JEL-codes: J63 K2 M41 M42 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2014-10, Revised 2014-10
New Economics Papers: this item is included in nep-acc and nep-law
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Published in SDE Series, October 2014, pages 1-36

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http://www.souken.kochi-tech.ac.jp/seido/wp/SDES-2014-4.pdf First version, 2014 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:kch:wpaper:sdes-2014-4

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