Is There an Association Between Director Option Compensation and the Likelihood of Misstatement?

Authors

Charles P. Cullinan, Bryant University
Hui Du, University of Houston-Clear LakeFollow
Gail B. Wright, Bryant UniversityFollow

Document Type

Article

Comments

Published by Elsevier in Advances in Accounting, volume 24, issue 1, pages 16-23. Bryant users may access this article here.

Keywords

Director Independence;Stock Option Compensation;Financial Misstatement

Publisher

Elsevier

Publication Source

Advances in Accounting

Abstract

Using a sample of 105 U.S. firms that misstated their revenue matched with a sample of non-misstatement firms, this article finds that companies whose independent directors do not receive stock options are less likely to misstate revenues than companies who meet the Sarbanes–Oxley definition of independence.