The Link between Earnings Timeliness, Earnings Conservatism and Board Composition: Evidence from the UK
Posted: 10 Sep 2003
This paper examines the links between accounting quality, proxied by earnings timeliness and conservatism, and the composition of the board of directors. Results indicate that firms with a higher proportion of outside board members are more likely to recognise bad news in earnings on a timely basis. However, firms whose boards comprise a relatively high proportion of outsiders do not display greater reporting conservatism with regard to the recognition of good news. These findings suggest that board composition is an important factor in determining the quality of UK firms' reported earnings with respect to incorporating bad news on a timely basis.
Note: Previously titled "The Link Between Earnings Conservatism and Board Composition: Evidence from the UK"
Keywords: Accounting quality, board composition, and corporate governance
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