Preparers and the financial reporting system

Sarah McVay and Brandon Szerwo

Accounting and Business Research, 2021, vol. 51, issue 5, 484-507

Abstract: We review the accounting and related literature on the preparation of public company financial reports. We highlight numerous impediments to producing high quality financial reports, focusing on the roles of management, the board of directors, and internal audit. Key incentives of the CEO do not encourage investments in financial reporting quality, despite evidence that these investments provide net benefits to the firm, instead, key incentives appear to elicit myopia. We also demonstrate that although theoretically the board of directors and internal audit are integral components of firms’ internal controls, in practice there are numerous obstacles to effective oversight, including a lack of independence from management. Recent regulations have lessened but not fully mitigated these concerns.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/00014788.2021.1932257 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:acctbr:v:51:y:2021:i:5:p:484-507

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RABR20

DOI: 10.1080/00014788.2021.1932257

Access Statistics for this article

Accounting and Business Research is currently edited by Vivien Beattie

More articles in Accounting and Business Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().