Corporate governance, SFAS 157 and cost of equity capital: evidence from US financial institutions

被引：13
作者：
Huang H.-W. [1 ]
Dao M. [2 ]
Fornaro J.M. [3 ]
机构：
[1] College of Management, National Cheng Kung University, No. 1, University Road, Tainan City
[2] College of Business and Innovation, University of Toledo, 2801 W Bancroft St, Toledo, 43606, OH
[3] School of Business, SUNY at Old Westbury, 223 Store Hill Rd, Old Westbury, 11568, NY
来源：
Review of Quantitative Finance and Accounting | 2016年 / 46卷 / 1期
关键词：
Corporate governance; Cost of equity capital; SFAS; 157;
D O I：
10.1007/s11156-014-0465-1
中图分类号：
学科分类号：
摘要：
This study examines the association between fair value measurements and the cost of equity capital under different fair value valuation methods, and assesses the impact of corporate governance on this relationship for US financial firms. We find that firms’ cost of equity capital is negatively associated with more verifiable fair value assets and positively related to less verifiable fair value assets. Furthermore, the positive association between less verifiable fair value assets and the cost of equity capital is mitigated under better corporate governance. The differential impact between more and less verifiable assets becomes smaller for firms with stronger governance. Our findings contribute to the ongoing debate on fair value regulation by investigating the economic consequences of adopting Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157) and the importance of audit committee financial expertise on fair value reporting. We also provide evidence on the importance of board independence, internal control strength, auditor industry specialists, and audit committee financial experts in fair value reporting. © 2014, Springer Science+Business Media New York.
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页码：141 / 177
页数：36
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