Shareholder Votes on Auditor Ratification and Subsequent Auditor Dismissals

2016 ◽  
Vol 31 (1) ◽  
pp. 129-139 ◽  
Author(s):  
Abhijit Barua ◽  
K Raghunandan ◽  
Dasaratha V. Rama
Keyword(s):  
Corporate Governance ◽  
Advisory Committee ◽  
Selection Process ◽  
Shareholder Voting ◽  
Public Companies ◽  
Auditor Selection ◽  
The U.S

SYNPOSIS The Advisory Committee on the Auditing Profession (ACAP [DoT 2008]), appointed by the U.S. Department of Treasury, recommended that regulators require public companies to have shareholder voting on auditor ratification. However, the SEC has sided with companies that sought to exclude proposals from shareholders seeking greater say in the auditor selection process. We use data from 12,664 shareholder votes on auditor ratification during 2011–2014 and find that subsequent auditor dismissals become more likely with increases in the proportion of shareholders not ratifying the auditor. The findings should be of interest to corporate governance activists and regulators, and reinforce suggestions that even small changes in shareholder votes can be associated with significant corporate changes.

Shareholder Voting on Auditor Selection, Audit Fees, and Audit Quality

2011 ◽  
Vol 87 (1) ◽  
pp. 149-171 ◽  
Author(s):  
Mai Dao ◽  
K Raghunandan ◽  
Dasaratha V. Rama
Keyword(s):  
Advisory Committee ◽  
Audit Quality ◽  
Audit Fees ◽  
Experimental Results ◽  
Shareholder Voting ◽  
Public Companies ◽  
Abnormal Accruals ◽  
Auditor Selection ◽  
Using Data ◽  
The U.S

ABSTRACT The Advisory Committee on the Auditing Profession (ACAP), formed by the U.S. Department of the Treasury, has recommended that all public companies be required to have shareholder ratification of auditor selection. Using data from 1,382 firms for the year ending December 31, 2006, we find that audit fees are higher in firms with shareholder voting on auditor ratification. We also find that firms that started having a shareholder vote pay higher fees than firms that stopped having a shareholder vote. In the second part of our study, we find that in firms with shareholder voting on auditor selection (1) subsequent restatements are less likely and (2) abnormal accruals are lower. Our findings are consistent with the experimental results in Mayhew and Pike (2004), and provide empirical grounding for the debate about mandating shareholder voting on auditor selection.

Role of auditor in agency conflict and corporate governance

2014 ◽  
Vol 8 (3) ◽  
pp. 333-353 ◽  
Author(s):  
Chia-Ching Cho ◽  
Chu-Hua Wu
Keyword(s):  
Corporate Governance ◽  
Agency Conflicts ◽  
Public Companies ◽  
Internal Governance ◽  
Content Type ◽  
Agency Conflict ◽  
Governance Indicators ◽  
Logistic Regressions ◽  
Auditor Selection

Purpose – The purpose of this study is to investigate whether hiring a high-quality auditor (i.e. industry specialist) depends on corporate governance indicators after controlling a different level of agency conflicts (ACs). Design/methodology/approach – This paper uses logistic regressions on 12,449 firm-year samples of Taiwanese public companies from 1998 to 2011 by grouping the samples into three categories (i.e. low, medium and high AC). Findings – The results show that the corporate governance indicators can explain the decision of auditor selection only in low and medium AC groups, which suggest that there may be a complementary relationship between external (i.e. auditors) and internal governance when the ACs are mild. Originality/value – The paper contributes to the ongoing debate between the complementary and substitutable effects. When the internal ACs are controlled, the internal governance and auditor selection are complemented.

scholarly journals Corporate governance: A risk management approach

2013 ◽  
Vol 10 (2) ◽  
pp. 104-113 ◽  
Author(s):  
Tracy Xu ◽  
Hugh Grove ◽  
Philipp Schaberl
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Corporate Governance ◽  
Boards Of Directors ◽  
Securities And Exchange Commission ◽  
Annual Reports ◽  
Management Approach ◽  
Rating Systems ◽  
Public Companies ◽  
The U.S

Risk management committees are now required for all U.S. financial institutions that are regulated by the U.S. Federal Reserve Bank. All U.S. public companies must now report their risk management activities for both Board of Directors and top management in their 10 K annual reports to the U.S. Securities and Exchange Commission (SEC). This paper analyzes one approach to risk management for public companies and their Boards of Directors. Since 2011, Disclosure Insight Inc. has issued risk ratings for over 1500 public companies in US. Its risk rating is based on the number, nature, and timing of 100 risk factors, which are across major categories, such as the SEC investigative activity, auditor issues, capital market events, and corporate governance issues. Our study finds significant positive abnormal risk-adjusted returns for companies with lower risk ratings and these companies also outperform the S&P500. Thus, this paper should be of interest to investors, company executives, and risk management committees, as well as SEC and other regulators. Alternatively, risk management committees in public companies could just establish their own rating systems, based upon their own key factors, as opposed to using the Disclosure Insight Inc. aggregate rating approach for all 100 risk factors.

CORPORATE GOVERNANCE IN THE 19TH CENTURY: EVIDENCE FROM THE CHESAPEAKE AND OHIO CANAL COMPANY

2009 ◽  
Vol 36 (2) ◽  
pp. 113-137 ◽  
Author(s):  
Robert W. Russ ◽  
Gary John Previts ◽  
Edward N. Coffman
Keyword(s):  
Corporate Governance ◽  
19Th Century ◽  
Annual Report ◽  
Governance Structure ◽  
Review Committee ◽  
Corporate Governance Structure ◽  
Theoretical Structure ◽  
The 19Th Century ◽  
The U.S

Presenting evidence from a 19th century corporation, the Chesapeake and Ohio Canal Company (C&O), the paper shows that issues of corporate governance have existed since the first corporations were established in the U.S. The C&O used a stockholder review committee to review the annual report of the president and directors. The paper shows how the C&O stockholders used this committee to supplement the corporate governance structure. The corporate governance structure of the C&O is also viewed from a theoretical structure as espoused by Hart [1995].

scholarly journals Corporate Governance of Artificial Intelligence in the Public Interest

Information ◽  
2021 ◽  
Vol 12 (7) ◽  
pp. 275
Author(s):  
Peter Cihon ◽  
Jonas Schuett ◽  
Seth D. Baum
Keyword(s):  
Artificial Intelligence ◽  
Corporate Governance ◽  
Law Enforcement ◽  
Nonprofit Organizations ◽  
Public Interest ◽  
Department Of Defense ◽  
The Public ◽  
Wide Range ◽  
The Media ◽  
The U.S

Corporations play a major role in artificial intelligence (AI) research, development, and deployment, with profound consequences for society. This paper surveys opportunities to improve how corporations govern their AI activities so as to better advance the public interest. The paper focuses on the roles of and opportunities for a wide range of actors inside the corporation—managers, workers, and investors—and outside the corporation—corporate partners and competitors, industry consortia, nonprofit organizations, the public, the media, and governments. Whereas prior work on multistakeholder AI governance has proposed dedicated institutions to bring together diverse actors and stakeholders, this paper explores the opportunities they have even in the absence of dedicated multistakeholder institutions. The paper illustrates these opportunities with many cases, including the participation of Google in the U.S. Department of Defense Project Maven; the publication of potentially harmful AI research by OpenAI, with input from the Partnership on AI; and the sale of facial recognition technology to law enforcement by corporations including Amazon, IBM, and Microsoft. These and other cases demonstrate the wide range of mechanisms to advance AI corporate governance in the public interest, especially when diverse actors work together.

Compensation Disclosures and Corporate Governance through Shareholder Voting

2018 ◽  
Author(s):  
Brian D. Cadman ◽  
Richard Carrizosa ◽  
Xiaoxia Peng
Keyword(s):  
Corporate Governance ◽  
Shareholder Voting
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