The link between corporate governance and corporate financial misconduct. A review of archival studies and implications for future research

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The link between corporate governance and corporate financial misconduct. A review of archival studies and implications for future research. / Velte, Patrick.
In: Management Review Quarterly, Vol. 73, No. 1, 02.2023, p. 353-411.

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@article{cbd17ffef3734f2fa5b7928b4e6ec498,
title = "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 review. Enforcement actions and fraud events as misconduct proxies, and the firm and institutional level of corporate governance are of lower relevance yet. The following review highlights that many studies on corporate governance find inconclusive results on firms{\textquoteright} financial misconduct. But there are indications that board expertise and especially gender diversity in the top management decreases firms{\textquoteright} financial misconduct. We know very little about the impact of non-shareholder stakeholders{\textquoteright} monitoring role on misconduct yet. In discussing potential future research, we emphasize the need for a more detailed analysis of misconduct proxies, recognition of moderator and especially mediator variables, especially in the interplay of the board of directors and external auditors.",
keywords = "Management studies, Corporate financial misconduct, corporate governance, Restatements, Enforcement, Board composition, ownership structure",
author = "Patrick Velte",
note = "Publisher Copyright: {\textcopyright} 2021, The Author(s).",
year = "2023",
month = feb,
doi = "10.1007/s11301-021-00244-7",
language = "English",
volume = "73",
pages = "353--411",
journal = "Management Review Quarterly",
issn = "2198-1620",
publisher = "Springer",
number = "1",

}

RIS

TY - JOUR

T1 - The link between corporate governance and corporate financial misconduct. A review of archival studies and implications for future research

AU - Velte, Patrick

N1 - Publisher Copyright: © 2021, The Author(s).

PY - 2023/2

Y1 - 2023/2

N2 - 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 review. Enforcement actions and fraud events as misconduct proxies, and the firm and institutional level of corporate governance are of lower relevance yet. The following review highlights that many studies on corporate governance find inconclusive results on firms’ financial misconduct. But there are indications that board expertise and especially gender diversity in the top management decreases firms’ financial misconduct. We know very little about the impact of non-shareholder stakeholders’ monitoring role on misconduct yet. In discussing potential future research, we emphasize the need for a more detailed analysis of misconduct proxies, recognition of moderator and especially mediator variables, especially in the interplay of the board of directors and external auditors.

AB - 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 review. Enforcement actions and fraud events as misconduct proxies, and the firm and institutional level of corporate governance are of lower relevance yet. The following review highlights that many studies on corporate governance find inconclusive results on firms’ financial misconduct. But there are indications that board expertise and especially gender diversity in the top management decreases firms’ financial misconduct. We know very little about the impact of non-shareholder stakeholders’ monitoring role on misconduct yet. In discussing potential future research, we emphasize the need for a more detailed analysis of misconduct proxies, recognition of moderator and especially mediator variables, especially in the interplay of the board of directors and external auditors.

KW - Management studies

KW - Corporate financial misconduct

KW - corporate governance

KW - Restatements

KW - Enforcement

KW - Board composition

KW - ownership structure

UR - http://www.scopus.com/inward/record.url?scp=85118471339&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/5d641601-3eed-3e0a-91ac-7b5f635b54b0/

U2 - 10.1007/s11301-021-00244-7

DO - 10.1007/s11301-021-00244-7

M3 - Journal articles

VL - 73

SP - 353

EP - 411

JO - Management Review Quarterly

JF - Management Review Quarterly

SN - 2198-1620

IS - 1

ER -