Money shouts! How effective are punishments for accounting fraud?

Research output: Contribution to journal › Article › peer-review

Standard Standard

Money shouts! How effective are punishments for accounting fraud? / Wang, Yang; Ashton, John K.; Jaafar, Aziz.
In: British Accounting Review, Vol. 51, No. 5, 100824, 30.09.2019.

Research output: Contribution to journal › Article › peer-review

HarvardHarvard

Wang, Y, Ashton, JK & Jaafar, A 2019, 'Money shouts! How effective are punishments for accounting fraud?', British Accounting Review, vol. 51, no. 5, 100824. https://doi.org/10.1016/j.bar.2019.02.006

APA

Wang, Y., Ashton, J. K., & Jaafar, A. (2019). Money shouts! How effective are punishments for accounting fraud? British Accounting Review, 51(5), Article 100824. https://doi.org/10.1016/j.bar.2019.02.006

CBE

Wang Y, Ashton JK, Jaafar A. 2019. Money shouts! How effective are punishments for accounting fraud?. British Accounting Review. 51(5):Article 100824. https://doi.org/10.1016/j.bar.2019.02.006

MLA

Wang, Yang, John K. Ashton, and Aziz Jaafar. "Money shouts! How effective are punishments for accounting fraud?". British Accounting Review. 2019. 51(5). https://doi.org/10.1016/j.bar.2019.02.006

VancouverVancouver

Wang Y, Ashton JK, Jaafar A. Money shouts! How effective are punishments for accounting fraud? British Accounting Review. 2019 Sept 30;51(5):100824. Epub 2019 Mar 28. doi: 10.1016/j.bar.2019.02.006

Author

Wang, Yang ; Ashton, John K. ; Jaafar, Aziz. / Money shouts! How effective are punishments for accounting fraud?. In: British Accounting Review. 2019 ; Vol. 51, No. 5.

RIS

TY - JOUR

T1 - Money shouts! How effective are punishments for accounting fraud?

AU - Wang, Yang

AU - Ashton, John K.

AU - Jaafar, Aziz

PY - 2019/9/30

Y1 - 2019/9/30

N2 - This study examines the impact of different punishments for Chinese accounting fraud on shareholder valuation of firms between 2007 and 2014. From an examination of both monetary and non-monetary ‘name and shame’ penalties, it is reported all punishments have a negative and significant impact on the shareholder wealth of fraudulent firms. Investors’ perceive punishments involving monetary penalties far more severely than non-monetary punishments used to combat accounting fraud. Stock market reactions are also sensitive to the type of fraud committed with manipulation of income statements viewed more negatively by investors than fraud related to disclosure. Information leakage to capital markets prior to the announcement of punishments is also observed. It is proposed fines have been relatively more effective, than ‘name and shame’ punishments in addressing Chinese accounting fraud during the last decade, due not least to information leakage.

AB - This study examines the impact of different punishments for Chinese accounting fraud on shareholder valuation of firms between 2007 and 2014. From an examination of both monetary and non-monetary ‘name and shame’ penalties, it is reported all punishments have a negative and significant impact on the shareholder wealth of fraudulent firms. Investors’ perceive punishments involving monetary penalties far more severely than non-monetary punishments used to combat accounting fraud. Stock market reactions are also sensitive to the type of fraud committed with manipulation of income statements viewed more negatively by investors than fraud related to disclosure. Information leakage to capital markets prior to the announcement of punishments is also observed. It is proposed fines have been relatively more effective, than ‘name and shame’ punishments in addressing Chinese accounting fraud during the last decade, due not least to information leakage.

KW - Accounting fraud

KW - Event study

KW - Information leakage

KW - Punishment

KW - Stock market reaction

U2 - 10.1016/j.bar.2019.02.006

DO - 10.1016/j.bar.2019.02.006

M3 - Article

VL - 51

JO - British Accounting Review

JF - British Accounting Review

SN - 0890-8389

IS - 5

M1 - 100824

ER -