I explore the impact financial statement transparency has on the probability of
restatement and the effect a restatement announcement has on the levels of future
financial statement transparency. Information theory suggests that a strong information
environment increases accounting quality. Using financial statement transparency as a
proxy for the information environment, I find that transparency is associated with a lower
probability of financial statement restatement. There are competing theories to predict
how restatement announcements affect future levels of transparency. Skinner’s (1953)
theory of operant conditioning, which states that behavior is modified based on positive
or negative conditioning suggests that the level of transparency increases after a
restatement announcement. However, expectancy theory suggests that firms engage in
certain behaviors in order to derive expected rewards or incentives. Motivation is
eliminated if the rewards are deemed unobtainable thereby eliminating managers’ incentive to improve their reporting strategy suggesting that the level of transparency
decreases after a restatement announcement. I find that restatement announcement has a
negative association with the transparency measure and the magnitude of this effect
decreases over time compared to non-restatement firms. These results are magnified if
the restatement is due to fraud. However, the changes are not significant. Further, the
transparency associations are mitigated if there is a change in CEO after the restatement
announcement. In addition, using a sample of firms that made a restatement
announcement matched with a sample of firms that did not make a restatement
announcement, the difference in the transparency measure before and after the
restatement announcement is statistically insignificant. / Includes bibliography. / Dissertation (Ph.D.)--Florida Atlantic University, 2018. / FAU Electronic Theses and Dissertations Collection
| Identifer | oai:union.ndltd.org:fau.edu/oai:fau.digital.flvc.org:fau_40783 |
| Contributors | Bressler, Paige D. (author), Kohlbeck, Mark (Thesis advisor), Florida Atlantic University (Degree grantor), College of Business, School of Accounting |
| Publisher | Florida Atlantic University |
| Source Sets | Florida Atlantic University |
| Language | English |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation, Text |
| Format | 86 p., application/pdf |
| Rights | Copyright © is held by the author, with permission granted to Florida Atlantic University to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder., http://rightsstatements.org/vocab/InC/1.0/ |
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