Effects of Collaboration Period of Chief Executive Officer and Internal Audit Director on Financial Reporting Complexity

Document Type : Research Paper

Authors

1 Assistant professor of Economics, Faculty of Economics and Political Sciences, Shahid Beheshti University

2 Ph.D. candidate of Accounting, Shahid Beheshti University

Abstract

This study investigates effects of collaboration time period of chief executive officer and internal audit director on financial reporting complexity. For this, the data from 60 firms listed in Tehran Stock Exchange during the period of 2012 to 2016 is tested using Robust Least Squares (RLS) method. The number of the board annual report pages is used as a criterion to measure the financial reporting complexity (the longer the reports, the more complexity). The findings of this research indicate that longer collaboration between CEO and internal audit director increases financial reporting complexity. The reason is that as the collaboration between them becomes longer, the CEO and director of internal audit conspire to hide poor performance of the management from investors, therefore they release longer reports (the more pages, the more complexity). ‌

Keywords

References

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Empirical Research in Accounting
Volume 10, Issue 3 - Serial Number 37
November 2020
Pages 213-234

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History

  • Receive Date: 08 August 2018
  • Revise Date: 30 May 2019
  • Accept Date: 22 June 2019

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