Board, audit committee and restatement-induced class action lawsuits |
| |
Authors: | Nana Y Amoah Alex P Tang |
| |
Institution: | a Old Dominion University, College of Business and Public Administration, Room 2169 Constant Hall, Norfolk, Virginia 23529, United States b Morgan State University, Graves School of Business and Management, 1700 East Cold Spring Lane, Baltimore MD 21251, United States |
| |
Abstract: | We examine the influence of monitoring provided by the board and audit committee on the probability of restatement-induced securities class action lawsuits using a sample of firms that have restated earnings in the period of 1997-2002. Logistic regression of the probability of restatement-induced class action lawsuits indicates a negative association between proportion of independent board members and the likelihood of restatement-induced class action lawsuits. We also find that when the market reacts more negatively to restatement announcements, shareholders are more likely to initiate a class action lawsuit. Finally, we document that restatement of revenues is positively associated with the likelihood of restatement-induced shareholder litigation. Our results are robust after controlling for the restatement initiator, restatements categorized as irregularities and Blue Ribbon Recommendations. |
| |
Keywords: | Restatement Litigation Class action Board Audit committee |
本文献已被 ScienceDirect 等数据库收录! |
|