Document Type

Article

Publication Date

2010

Publication Title

International Research Journal of Finance and Economics

Volume

51

Keywords

Director Tenure, Independent Audit Committee, Earnings Management

Abstract

This study examines whether board tenure of directors on the independent audit committee affects the effectiveness of the committee in oversight of financial reporting.Using a larger size sample of 7,700 firm-year observations over the period 1998 to 2005 in U.S., we document strong evidence that the proportion of long tenure directors on the independent audit committee is negatively associated with earnings management. The results are robust to several sensitivity analyses. Our findings further corroborate the notion that long tenure directors have greater expertise and experience to effectively monitor financial reporting process.

Comments

This article was originally published in The International Research Journal of Finance and Economics, 2010.

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