Directors with multiple directorships and accounting conservatism: Evidence from banks in South Asia

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Abstract

This study investigates the effect of directors with multiple directorships on banks’ accounting conservatism in South Asia (Bangladesh, India, Pakistan and Sri Lanka). Based on 93 banks, I find that the relationship between directors with multiple directorships and accounting conservatism is an inverse ‘U’ shape. That is, at a low level of multiple directorships, banks follow conservatism in financial reporting (reputation effect), then at a high level of multiple directorships reporting conservatism declines (busyness effect). I also find an optimal level of multiple directorships at which directors influence the most on financial reporting conservatism. The findings of this study remain robust when I modify the definition of multiple directorships and control for multiple directorships by bank chairs and insolvency risk under alternative settings.
Original languageEnglish
Title of host publicationAFAANZ 2020 Virtual Conference
Pages1-26
Number of pages26
Publication statusPublished - 5 Jul 2020
EventAccounting & Finance Association of Australia and New Zealand - Online
Duration: 5 Jul 20207 Jul 2020

Conference

ConferenceAccounting & Finance Association of Australia and New Zealand
Abbreviated titleAFAANZ 2020
Period5/07/207/07/20

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