Financial Reports Quality and Corporate Social Responsibility

Hsiangtsai Chiang, Li-Jen He and Cang-Fu Shiao

Asian Economic and Financial Review, 2015, vol. 5, issue 3, 453-467

Abstract: This study explores the correlation between CSR and the quality of financial reports according to Stewardship Theory for 100 Best Corporate Citizens. The empirical results of the overall samples indicated that by practicing CSR, companies can effectively reduce their level of earnings management, providing quality financial reports. The cluster sampling results show that CSR has a mediating effect, reducing the direct effects of corporate governance board structures on the quality of financial reports. This study considers the emergence of Stewardship Theory compensates for the defects and deficiencies of agency theory in explaining the behaviors of managers. This study offers deeper insights to policy makers and investors to understand the association between company CSR performance and their financial reporting quality. The results suggest that company stakeholders should pay more attention when considering the influence of company CSR investment performance.

Keywords: Corporate governance; Corporate social responsibility (CSR); Financial report quality; Stewardship theory. (search for similar items in EconPapers)
Date: 2015
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