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
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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - Noncompliance with Non-Accounting Securities Regulations and GAAP Violations
AU - Choi, Sun Hwa
AU - Young, Steven Eric
AU - Zhang, Xiu-Ye
N1 - 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.
PY - 2019/4/23
Y1 - 2019/4/23
N2 - 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.
AB - 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.
KW - compliance
KW - GAAP violations
KW - noncompliance with securities regulations
KW - SEC's enforcement actions
M3 - Journal article
VL - 46
SP - 370
EP - 399
JO - Journal of Business Finance and Accounting
JF - Journal of Business Finance and Accounting
SN - 0306-686X
IS - 3-4
ER -