Event

Blast from the Past: Directors' bankruptcy experience and financial reporting quality

  • Wed 4 May 22

    14:00 - 16:00

  • Online

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  • Event speaker

    Professor Beatriz García Osma, Universidad Carlos III de Madrid

  • Event type

    Lectures, talks and seminars
    Essex Accounting Centre Research Seminar Series

  • Event organiser

    Essex Business School

  • Contact details

    Dr Chaoyuan She

The aim of the Essex Accounting Centre (EAC) research seminar series is to support our world-class research activities in five key areas: accounting and global development; capital Markets, audit, regulation & reporting; publicness and resilience, precarity, exclusion & social justice; and environment, climate change & vulnerability. The seminar series is also expected to promote inter-disciplinary research that links the work of members of the centre with others both within the university and with external institutions.

Seminar abstract

We study if directors' corporate bankruptcy experience at one firm is associated with financial reporting quality at other firms where the director also serves in.

Using a sample of US directors interlocked with firms that file for bankruptcy, we find greater tolerance for earnings management after a bankruptcy experience.

The results are concentrated in settings where the director is an independent director and sits on the audit committee.

This suggests a shift in directors' risk-tolerance and deterioration in their monitoring incentives.

We find no evidence on the competing hypothesis of director distraction. Surviving a bankruptcy relatively unscathed lowers directors' perception of the severity of distress costs, with negative consequences for their monitoring over the financial reporting system.

 

How to join this seminar

This seminar is free to attend with no need to register in advance.

We welcome you to join us online on Wednesday 4 May 2022 at 2pm.

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Speaker bio

Professor Beatriz García Osma

Beatriz García Osma is Professor of Accounting at Universidad Carlos III de Madrid and Research Member at ECGI. She is a visiting professor at Stockholm School of Economics. Previously, she was an Associate Professor at Universidad Autónoma de Madrid.

She holds a PhD in Accounting & Finance from Lancaster University, where she was also a Marie Curie pre- and post-doctoral researcher.

Her research focuses on the links between financial reporting, corporate governance and capital markets.

Beatriz has published in national and international Journals, and participated and directed several research projects.

She was elected to represent Spain in the Board of the European Accounting Association (2014-2020), and also, as a member of the EAA Management Committee (2014-2017). She is the editor of the European Accounting Review (2020-2023) and a past editor of the Spanish Journal of Finance and Accounting. She belongs to several editorial boards of international journals.

 

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