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

Détails

ID Serval
serval:BIB_76EB0C4F578E
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Institution
Titre
Audit committees' independence and the information content of earnings announcements in Western Europe
Périodique
Journal of Accounting Literature
Auteur⸱e⸱s
Poretti C., Schatt A., Bruynseels L.
ISSN
0737-4607
Statut éditorial
Publié
Date de publication
06/2018
Peer-reviewed
Oui
Volume
40
Pages
29-53
Langue
anglais
Résumé
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′600 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 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-clé
Audit committee, Europe, Earnings announcements, Market reaction
Web of science
Création de la notice
28/11/2017 11:33
Dernière modification de la notice
20/08/2019 15:34
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