Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments 2015 erstellt
Description:
Prior research in accounting and finance mainly focused on the impact of board structure on financial reporting quality and findings have been mixed and ambiguous. We examine the impact of board processes on financial reporting quality. From a theoretical stance, we argue that application of agency theory alone does not adequately explain the dynamics of board behavior around accounting issues. Instead, boards need to be viewed from a social-psychological process related to group participation and interaction. Our examination of archival and survey data, in 184 ASX companies, revealed that effort norms, and use of knowledge and skills, are positively and significantly related to financial reporting quality, whereas cognitive conflicts have a curvilinear relationship. We also apply group's input-process-output heuristic model and find that board processes mediate the association between board structure and financial reporting quality. Our findings inform researchers, practitioners and policy makers that in addition to board structure, processes are also important for effective monitoring of financial reporting