Employee quality and financial reporting outcomes

Andrew C. Call, John L. Campbell, Dan S. Dhaliwal and James R. Moon

Journal of Accounting and Economics, 2017, vol. 64, issue 1, 123-149

Abstract: We examine the association between employee quality and financial reporting outcomes. Using the average workforce education level in MSA(s) where the firm operates as a proxy for employee quality, we find that firms with a high-quality workforce exhibit higher accruals quality, fewer internal control violations, and fewer restatements. These firms also issue superior management forecasts, in terms of frequency, timeliness, accuracy, precision, and bias. Employees located at the firm's headquarters primarily drive our findings. Our evidence suggests employee quality, particularly at a firm's headquarters, is associated with both mandatory and voluntary disclosure quality.

Keywords: employee characteristics; employee quality; education; financial reporting quality (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (35)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:64:y:2017:i:1:p:123-149

DOI: 10.1016/j.jacceco.2017.06.003

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