Employee quality and financial reporting outcomes

Andrew C. Call; John L. Campbell; Dan S. Dhaliwal; James Moon

doi:10.1016/j.jacceco.2017.06.003

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Journal of Accounting and Economics Vol. 64 No. 1 2017

Employee quality and financial reporting outcomes

Andrew C. Call¹; John L. Campbell²; Dan S. Dhaliwal³; James Moon⁴

¹ Arizona State University · ² University of Georgia · ³ University of Arizona · ⁴ Georgia State University

Abstract

We examine the association between employee quality and financial reporting outcomes. Using the average workforce education level in MSA(s) where the firm operates as a proxy for employee quality, we find that firms with a high-quality workforce exhibit higher accruals quality, fewer internal control violations, and fewer restatements. These firms also issue superior management forecasts, in terms of frequency, timeliness, accuracy, precision, and bias. Employees located at the firm's headquarters primarily drive our findings. Our evidence suggests employee quality, particularly at a firm's headquarters, is associated with both mandatory and voluntary disclosure quality.

DOI: 10.1016/j.jacceco.2017.06.003
Volume: 64
Issue: 1
Pages: 123-149
Language: en
Sources: bibtex:phds-export.bib openalex crossref

Employee quality and financial reporting outcomes

Abstract

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