Discussion of Corporate Governance Reform and Executive Incentives: Implications for Investments and Risk Taking

Frank H. Selto and Marc Cussatt

Contemporary Accounting Research, 2013, vol. 30, issue 4, 1333-1343

Abstract: We discuss the strengths and weaknesses of the article by Cohen, Dey and Lys (CDL). Strengths include persuasive theoretical arguments for impacts of the Sarbanes Oxley Act (SOX) on corporate investment strategies and for several mechanisms through which firms influence changes in risky investments. CDL also provides intriguing opportunities for learning about impacts of external regulatory events and for enriching management accounting research and classroom discussions of management control. Weaknesses include (1) narrow scope, perhaps driven by archival data availability; (2) difficulties in implementing the research design and method; (3) possible bias of incentive and investment measures; (4) incomplete estimates of the effect of SOX on compensation, incentives, and investments; and (5) questionable control of endogeneity. We offer recommendations from extant literature to mitigate these weaknesses in future research.

Date: 2013
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1111/1911-3846.12017

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:wly:coacre:v:30:y:2013:i:4:p:1333-1343

Access Statistics for this article

More articles in Contemporary Accounting Research from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().