Is it a matter of governance or judicial favoritism? Legal expertise at an executive level and its use in cases of corporate financial fraud

Yingzhi Nie, Yanhua Na and Peng Chen

Finance Research Letters, 2024, vol. 67, issue PB

Abstract: This study examines how executives’ legal expertise affects corporate financial fraud and the mechanism behind this using data from A-listed companies between 2011 and 2021. Findings show a positive correlation between executives’ legal backgrounds and corporate financial fraud, which is mainly driven by external audit quality and corporate social responsibility. This finding provides evidence of how the law affects small-scale corporate governance. This study emphasizes the value of firms leveraging their executives’ legal background, which helps regulators identify potential hazards in corporations.

Keywords: Executive legal expertise; Financial fraud; External audit quality; Corporate social responsibility (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324009188

DOI: 10.1016/j.frl.2024.105888

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