Board Reforms And Accounting Information Quality:Worldwide Evidence

Subsequent to the escalation of the popularity of board reforms between 1990 and 2012,this research examines the corporate board reforms’ impact on accounting information quality using a sample of 41 countries ranging from developed to developing economies.I find evidence that the adoption of board reforms increases accounting information quality using a difference-in-difference design.The findings also show that firms in countries with stronger legal enforcement exhibit higher accounting information quality as compared to those in countries with weaker legal enforcement.There is a greater increase in the accounting information quality in comply-or-explain board reforms in comparison to the rule-based board reforms.Further analysis on the reform components shows that board independence and audit committee and auditor independence reforms have a greater impact on accounting information quality.The findings also suggest that non-board reforms have no significant effect on the accounting information quality.My results are consistent with previous studies(Fauver et al.,2017)both at the cross-country study level and at country-level.The results obtained are robust to alternative accounting information quality measures and legal enforcement measures,and various control variables.