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Journal Article
Accounting Expertise and Financial Reporting Complexity
Journal of Accounting and Economics
Author(s)
This study tests whether firms seek to mitigate the adverse effects of Financial Reporting Complexity (FRC) by investing in accounting expertise. We develop a measure of FRC based on the complexity of accounting standards that govern annual disclosures. We find that FRC is positively related to the accounting expertise on a firm?s board of directors and audit committee. We also find that accounting expertise mitigates the relation between FRC and negative reporting outcomes. Collectively, this study increases our understanding of the actions firms take to mitigate the negative consequences of FRC, and the role of accounting expertise in this setting.
Date Published:
2019
Citations:
Leone, Andrew J., Roman Chychyla, Miguel Minutti-Meza. 2019. Accounting Expertise and Financial Reporting Complexity. Journal of Accounting and Economics. (1)226-253.