The Cost to Firms of Cooking the Books

By Jonathan M. Karpoff, D. S. Lee, Gerald S. Martin. Journal of Financial and Quantitative Analysis, 2008

1,081 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/d53ef150260277a48a034608afa20b07d344c6f9

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Citations in the corpus

The Spread of Aggressive Corporate Tax Reporting: A Detailed Examination of the Corporate-Owned Life Insurance Shelter (2011, background): “In their study of SEC enforcement actions, Karpoff et al. (2006) find that 66% of the total market loss upon disclosure of misconduct can be attributed to a loss in reputation and that, on average, the reputational penalty exceeds the legal penalty by more than seven and one-half times.”
How firms respond to financial restatement : CEO successors and external reactions (2014, result): “A number of studies in the accounting literature have also demonstrated a significant, negative market response to the announcement of financial restatements (Owers, Lin, & Rogers, 2002; Palmrose, Richardson, & Scholz, 2004; Karpoff et al., 2008).”
Institutional Investors, Political Connections, and the Incidence of Regulatory Enforcement Against Corporate Fraud (2014, background): “Fraud cases bring into question the integrity of other firms and executives who have gained the trust of the public and, more significantly, their investors (Karpoff and Lott 1993; Karpoff et al. 2008).”
Evidence on Contagion in Earnings Management (2015, neutral): “Second, several papers claim that SEC enforcement and class action lawsuits are better proxies for accounting fraud relative to earnings restatements (Karpoff et al. 2008a, 2008b; Dyck et al. 2010).”
Public and Private Enforcement of Securities Laws: Resource-Based Evidence (2009, neutral): “, La Porta et al. (1998) and Roe (2006).”
Shareholder-Initiated Class Action Lawsuits: Shareholder Wealth Effects and Industry Spillovers (2009, background): “when determining the extent of shareholder value losses associated with the filing of class action lawsuits.(18)”
Earnings Restatements, Changes in CEO Compensation, and Firm Performance (2008, background): “Karpoff et al. (2006) provide detailed documentation of the outcome of such litigation.”
Tournament Incentives and Corporate Fraud (2015, background): “Karpoff, Lee, and Martin (2008a, 2008b) document that 1,433 of 2,206 culpable employees in fraud cases were VPs, of which only a third (515) were CEOs.”
Regulatory Sanctions and Reputational Damage in Financial Markets (2017, methodology): “One study (Karpoff et al. (2008)) addresses this by cumulating marketvalue impacts across all identifiable announcements.”
Equity Incentives and Corporate Fraud in China (2015, positive): “Moreover, Karpoff et al. (2008) estimate that firms can lose, on average, 38 % of their market value as a result of SEC enforcement actions. weakens trust in firm disclosures as well, and it increases uncertainty about financial statements, which ultimately leads to higher costs of raising capital…”
Corporate Fraud and the Value of Reputations in the Product Market (2014, positive): “The consequences of a damaged reputation that results from corporate misconduct have been investigated extensively in previous studies (Alexander, 1999; Gande and Lewis, 2009; Karpoff and Lott, 1993; Karpoff et al., 2008a, 2008b).”