2021
DOI: 10.1007/s11301-021-00244-7
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The link between corporate governance and corporate financial misconduct. A review of archival studies and implications for future research

Abstract: In this article, we review recent archival research articles (98 studies) on the impact of corporate governance on restatements, enforcement activities and fraud as corporate financial misconduct. Applying an agency-theoretical view, we mainly differentiate between four levels of corporate governance (group, individual, firm, and institutional level). We find that financial restatements on the one hand and the group and individual level of corporate governance on the other hand are dominant in our literature r… Show more

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Cited by 45 publications
(28 citation statements)
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References 146 publications
(211 reference statements)
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“…Financial restatement refers to identifying and correcting intentional or unintentional irregularities in one or more financial statements (Velte, 2021). Such irregularities are either because of errors in the compilation and preparation of the financial statement or because of intentional earnings manipulation to mislead users of the financial statement (Dempster and Oliver, 2019).…”
Section: Literature Review and Hypothesismentioning
confidence: 99%
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“…Financial restatement refers to identifying and correcting intentional or unintentional irregularities in one or more financial statements (Velte, 2021). Such irregularities are either because of errors in the compilation and preparation of the financial statement or because of intentional earnings manipulation to mislead users of the financial statement (Dempster and Oliver, 2019).…”
Section: Literature Review and Hypothesismentioning
confidence: 99%
“…Because weak corporate governance exacerbates the agency cost of free cash flow, higher dividends constrain management control over cashflows in countries with strong investor protection (LaPorta et al, 2000). Managers of restating firms are at risk of punishment and litigation because of poor corporate governance (Velte, 2021); therefore, they adhere to the dividend policy. Arena and Julio (2021) use class-action lawsuits to document a negative Dividend payment association between industry litigation risk and dividend policy.…”
Section: Literature Review and Hypothesismentioning
confidence: 99%
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“…When a manager is regularly looking over an agent's shoulder, it is difficult for that agent to find opportunity to misbehave. Regular audits have a similar effect-fear that an auditor will discover the misconduct ensures that such misconduct is avoided (Neville et al 2019;Velte 2021).…”
Section: Hierarchical Oversightmentioning
confidence: 99%
“…Almaleki et al [29] aimed to investigate the comparability between the impact of managerial pride and overconfidence on financial statements. Velte [30] showed the link between corporate governance and corporate financial misconduct. Guluma [31] aimed to investigate the impact of CG that measures on firm performance and the role of managerial behavior in the relationship between CG mechanism and firm performance.…”
Section: Related Workmentioning
confidence: 99%