英文摘要 |
This paper investigates whether the company's board member’s politicalconnection (hereafter, PCs) is associated with the propensity of accountingrestatements. Moreover, this paper also examines how market reacts to theaccounting restatements of firms with PCs board. Using Taiwanese listed firmswith matching sample from year 1990 to 2012, we find that if the firms are PCs,they will have higher probabilities to restate their financial reports. Besides, Incontrast to non-PCs, PCs suffer from smaller market discounts as announcingrestatements. Furthermore, we find that government officials and electedrepresentatives significantly relate to the restatement of financial reports exceptingfor party members. Finally, after controlling for endogeneity problem and deletingfirms which government owns their shares, our primary conclusion remainsunchanged. |