TY - JOUR
T1 - Complexity of financial reporting standards and accounting expertise
AU - Chychyla, Roman
AU - Leone, Andrew J.
AU - Minutti-Meza, Miguel
PY - 2019/2
Y1 - 2019/2
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=85056642100&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85056642100&partnerID=8YFLogxK
U2 - 10.1016/j.jacceco.2018.09.005
DO - 10.1016/j.jacceco.2018.09.005
M3 - Article
AN - SCOPUS:85056642100
VL - 67
SP - 226
EP - 253
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
SN - 0165-4101
IS - 1
ER -