Does the Facial Trustworthiness of Resigned Independent Directors Affect Financial Reporting Conservatism?
Yu-Hsuan Chung/Department of Accounting and Information Technology , National Chung Cheng University
Shaio Yan Huang/Department of Accounting and Information Technology , National Chung Cheng University
Yu-Cheng Li/Deloitte & Touche, Taiwan
Abstract
This study investigates whether independent directors' facial trustworthiness affect financial reporting conservatism. We focus on independent director resignation events, and the empirical results provide supporting evidence that resigned independent directors with higher facial trustworthiness are negatively associated with financial reporting conservatism. However, this negative relation is significantly moderated by resigned independent directors as chairmen of functional committees. Overall, the results highlight that independent directors' facial trustworthiness reflects the impact on financial reporting disclosure decisions.
Keywords
Resigned independent directorsFacial trustworthinessFinancial reporting conservatism
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