Audit committees’ independence and the information content of earnings announcements in Western Europe

Poretti, Cédric (Ecole hôtelière de Lausanne, HES-SO // University of Applied Sciences Western Switzerland) ; Schatt, Alain (University of Lausanne - HEC) ; Bruynseels, Liesbeth (KU Leuven - Accounting department)

We examine whether the percentage of independent members sitting on the audit committee, in different institutional settings, impacts the market reaction (measured by the abnormal stock returns variance and the abnormal trading volume) to earnings announcements. For our sample composed of more than 7’500 earnings announcements made by European firms from 15 countries between 2006 and 2014, we find that the market reactions to earnings announcements are significantly larger when the audit committee is more independent, but only in countries with weak institutional setting. Our results generally hold after controlling for numerous methodological issues. We conclude that more independent audit committees are substitutes for weak institutions to increase the credibility of earnings announcements. Our results should be of great interest for European regulators who recently introduced new requirements for public firms regarding audit committees’ independence.


Mots-clés:
Type de conférence:
full paper
Faculté:
Economie et Services
Ecole:
EHL
Classification:
Economie/gestion
Adresse bibliogr.:
Valencia, Spain, 10-12 May 2017
Date:
Valencia, Spain
10-12 May 2017
2017
Pagination:
56 p.
Publié dans
Proceedings of the 40th European Accounting Association Annual Congress 2017
Le document apparaît dans:

Note: The status of this file is: restricted


 Notice créée le 2017-10-30, modifiée le 2018-12-05

Fichiers:
Télécharger le document
PDF

Évaluer ce document:

Rate this document:
1
2
3
 
(Pas encore évalué)