We acknowledge the many helpful comments of Robert Faff (Editor), Mike Bradbury (Deputy Editor), Pallab Biswas, Elizabeth Carson, Raymond da Silva Rosa, Janice How, Gary Monroe, Sian Owen, Kwok Tong Soo, Tony Van Zijl, Terry Walter and Stephen Young. Partial funding for this research was provided by the Australian Research Council via Development Program grant DP0877596 and by grant F/00 185/WE from the Leverhulme Trust.
Corporate governance, accounting and finance: A review
Version of Record online: 11 NOV 2010
© 2010 The Authors. Accounting and Finance © 2010 AFAANZ
Accounting & Finance
Volume 51, Issue 1, pages 96–172, March 2011
How to Cite
Brown, P., Beekes, W. and Verhoeven, P. (2011), Corporate governance, accounting and finance: A review. Accounting & Finance, 51: 96–172. doi: 10.1111/j.1467-629X.2010.00385.x
- Issue online: 1 MAR 2011
- Version of Record online: 11 NOV 2010
- Received 11 March 2009; accepted 30 September 2010 by Robert Faff (Editor).
- Corporate governance;
- Agency costs;
- Board committees;
- Ownership structure;
- Shareholder activism;
- Auditor independence;
- Accounting quality;
We review accounting and finance research on corporate governance (CG). In the course of our review, we focus on a particularly vexing issue, namely endogeneity in the relationships between CG and other matters of concern to accounting and finance scholars, and suggest ways to deal with it. Given the advent of large commercial CG databases, we also stress the importance of how CG is measured and in particular, the construction of CG indices, which should be sensitive to local institutional arrangements, and the need to capture both internal and external aspects of governance. The ‘stickiness’ of CG characteristics provides an additional challenge to CG scholars. Better theory is required, for example, to explain whether various CG practices substitute for each other or are complements. While a multidisciplinary approach to developing better theory is never without its difficulties, it could enrich the current body of knowledge in CG. Despite the vastness of the existing CG literature, these issues do suggest a number of avenues for future research.