Business Ethics and Financial Reporting Quality: Evidence from Korea

• Autores: Tae Hee Choi, Jinhan Pae
• Localización: Journal of business ethics, ISSN 0167-4544, Vol. 103, Nº. 3, 2011, págs. 403-427
• Idioma: inglés
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• Dialnet Métricas: 4 Citas
• Resumen

  • This study examines the relationship between corporate commitment to business ethics and financial reporting quality. We posit that companies with a higher level of ethical commitment exhibit better quality financial reporting than those with a lower level of ethical commitment. Consistent with our prediction, we find that companies with a higher level of ethical commitment are engaged in less earnings management, report earnings more conservatively, and predict future cash flows more accurately than those with a lower level of ethical commitment. We also find that corporate commitment to business ethics has perpetuating effects on future financial reporting quality.