Noncompliance with Non-Accounting Securities Regulations and GAAP Violations

Choi, Sun Hwa and Young, Steven Eric and Zhang, Xiu-Ye (2019) Noncompliance with Non-Accounting Securities Regulations and GAAP Violations. Journal of Business Finance and Accounting, 46 (3-4). pp. 370-399. ISSN 0306-686X

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Using enforcement actions by the Securities and Exchange Commission (SEC) as a proxy for noncompliance with securities regulations, we examine whether a firm’s compliance with non-accounting laws and regulations is associated with GAAP violations. We find that firms that violate securities regulations related to non-accounting issues are more likely to report accounting restatements than control firms that comply with securities regulations. We also find that the difference between the two groups is significant only for the periods subsequent to the start of the noncompliance period but not for periods prior to this date. Our results highlight the interrelation between the accounting and compliance systems, and suggest that managers who are non-compliant with non-accounting regulations are also more likely to be non-compliant with accounting rules.

Item Type:
Journal Article
Journal or Publication Title:
Journal of Business Finance and Accounting
Additional Information:
This is the peer reviewed version of the following article: Choi, S, Young, S, Zhang, X‐Y. Noncompliance with non‐accounting securities regulations and GAAP violations. J Bus Fin Acc. 2019; 46: 370– 399. which has been published in final form at This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
Uncontrolled Keywords:
?? compliancegaap violationsnoncompliance with securities regulationssec's enforcement actionsfinancebusiness, management and accounting (miscellaneous)accounting ??
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Deposited On:
02 Apr 2019 10:55
Last Modified:
28 Jun 2024 01:17