 Non‐generally accepted accounting principles disclosures and audit committee chairs’ external directorshipsCheng‐Hsun Lee Journal of Business Finance & Accounting, 2022, vol. 49, issue 1-2, 111-139 Abstract: I examine the relation between the quality of non‐generally accepted accounting principles (GAAP) earnings disclosures and the number of external directorships held by a firm's independent audit committee chair (ACC). I find that firms with ACCs holding more external directorships provide higher quality non‐GAAP disclosures than those who do not hold outside board positions. When the ACC has at least one external directorship, the firm's non‐GAAP exclusions are more transitory, indicating that they are of higher quality. In addition, when the ACC has at least one external directorship, non‐GAAP exclusions that are incremental to those excluded by analysts are smaller in magnitude and therefore are less aggressive. Overall, the results suggest that the number of external directorships ACCs holds plays an important role in firms’ non‐GAAP disclosures. The results are consistent with a reputation cost perspective, where ACCs with more external directorships face higher reputation concerns from having more to lose, resulting in stronger monitoring and thus higher quality non‐GAAP disclosures. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:49:y:2022:i:1-2:p:111-139 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker More articles in Journal of Business Finance & Accounting from Wiley Blackwell |
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