Does Media Exposure Affect Financial Reporting Quality Through Auditors?

The media play an important role in capital markets. Media coverage can attract the attention of investors and the public at large and affect the decisions of management. As such, the media can have a corporate governance role in disciplining firms and their managers. For example, prior research indicates that, following negative media exposure, weak boards are more likely to take corrective actions such as replacing the CEO and board chair, increasing the proportion of outsiders on the board, and decreasing the use of staggered boards.

In a recent study, we investigate the possibility that, in addition to this direct … Read more