 Watchdog from academia: Do academic independent directors matter for financial statement fraud?Shigang Wen, Jianping Li, Chuangxia Huang and Xiaoqian Zhu International Review of Economics & Finance, 2025, vol. 101, issue C Abstract: We examine whether academic independent directors affect financial statement fraud. Using a sample of independent directors’ academic experience data for Chinese public firms, we find a significantly negative relation between academic independent directors and financial statement fraud. This finding is robust after applying various methods to address potential endogeneity concerns. Further analyses suggest that the negative relation between academic independent directors and financial statement fraud is more pronounced when academic independent directors are professors and possess accounting and technological expertise, sit on audit committees, compensation committees, multiple boards, and have relatively low-level compensation. In addition, the negative relation is stronger for non-state-owned firms and firms audited by small auditors. Overall, our findings suggest that academic independent directors are watchdogs for financial statement fraud. Keywords: Academic independent director; Financial statement fraud; Corporate governance; Board committee; Professor; Compensation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:101:y:2025:i:c:s105905602500382x DOI: 10.1016/j.iref.2025.104219 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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