Ethical Financial Reporting And Disclosure Quality

893 Words Oct 24th, 2015 4 Pages
Article #8
Abstract. The article reviewed was Director Overlap, Ethical Financial Reporting, and Improvements in Disclosure Quality. The key of the abstract is to emphasize the positive influence of independent audit committee on the ethical financial reporting, corporate disclosure, and company ethical environment overall (p. 183).
Introduction. The author studies the relationships between the director overlap and financial reporting quality, and for that purpose, analyzes the compensation measurement system and how it tights to performance (p. 183). The researcher also focuses on the impact of audit committee on the reporting and disclosure. The main objective of the research is to examine the impact of director overlap on earnings, compensation of executives and independence of the audit committee on financial performance, ethical financial reporting, and disclosure. The importance of the study lies in analysis of the control issues, equity-based measures, interests of shareholders, managers’ ability to prevent fraud, independent financial experts, ethics requirement for reporting, and SEC ethics rule. The author considers two problems: how the level or degree of audit committee independence affect the quality of financial reporting; and the relationship between cash incentives and compensation (p. 184).
Literature Review. The author uses a systematic review of literature in the research. The literature review is categorized into two parts: study the relationships…
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