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  • Accepted_2019.03.15

    Rights statement: This is the peer reviewed version of the following article: Choi, S, Young, S, Zhang, X‐Y. Noncompliance with non‐accounting securities regulations and GAAP violations. J Bus Fin Acc. 2019; 46: 370– 399. https://doi.org/10.1111/jbfa.12377 which has been published in final form at https://onlinelibrary.wiley.com/doi/10.1111/jbfa.12377 This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.

    Accepted author manuscript, 709 KB, PDF-document

    Embargo ends: 23/04/21

    Available under license: CC BY-NC: Creative Commons Attribution-NonCommercial 4.0 International License

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Noncompliance with Non-Accounting Securities Regulations and GAAP Violations

Research output: Contribution to journalJournal article

Published
<mark>Journal publication date</mark>23/04/2019
<mark>Journal</mark>Journal of Business Finance and Accounting
Issue number3-4
Volume46
Number of pages30
Pages (from-to)370-399
Publication statusPublished
Original languageEnglish

Abstract

Using enforcement actions by the Securities and Exchange Commission (SEC) as a proxy for noncompliance with securities regulations, we examine whether a firm’s compliance with non-accounting laws and regulations is associated with GAAP violations. We find that firms that violate securities regulations related to non-accounting issues are more likely to report accounting restatements than control firms that comply with securities regulations. We also find that the difference between the two groups is significant only for the periods subsequent to the start of the noncompliance period but not for periods prior to this date. Our results highlight the interrelation between the accounting and compliance systems, and suggest that managers who are non-compliant with non-accounting regulations are also more likely to be non-compliant with accounting rules.

Bibliographic note

This is the peer reviewed version of the following article: Choi, S, Young, S, Zhang, X‐Y. Noncompliance with non‐accounting securities regulations and GAAP violations. J Bus Fin Acc. 2019; 46: 370– 399. https://doi.org/10.1111/jbfa.12377 which has been published in final form at https://onlinelibrary.wiley.com/doi/10.1111/jbfa.12377 This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.