이사회 구성원의 교육적 배경과 재무보고의 질

This study investigates the influence of demographic characteristics of the board of directors on financial reporting quality. Among demographic characteristics, we focus on educational background represented by academic majors in law and business. Previous researches show that the demographical characteristics of top management team such as age, gender, experience and educational background affect on financial reporting quality. Especially, researches argue that the educational background are related with risk preference of management. Also accounting and financial experience have positive relation with financial reporting quality. In this study, we use absolute value of discretionary accruals measured by the Performance matched modified Jones Model (Kothari et al 2005) and accrual quality measured by modified Dechow and Dichev model (Francis et al 2005) to proxy financial reporting quality. In addition, we classify educational background based on the highest level of schooling of the directors. We measure educational background of directors as ratio (proportion of the board of directors), numbers (number of directors with each major), and indicator variables (at least one director with each major). The sample is gathered from TS2000 database collected by Korea Listed Companies Association from 2002 to 2010. We find that the proportion, the number and the indicator of directors majoring in law and business are negatively related with the absolute value of discretionary accruals meaning higher financial reporting quality. The result is consistent using modified Dechow and Dichev model. We also analyze the relationship between the educational background of inside and outside directors and the absolute value of discretionary accruals. The results show that the major of inside directors has strong relation with financial reporting quality while there is no significant relation between the major of outside directors and financial reporting quality. This result means that the educational characteristics of inside directors affect on the financial decision more strongly than that of outside directors. In conclusion, the educational background of directors such as their major affects on the financial reporting quality. Especially, the majors of law and business affect positively the financial reporting quality. This paper contributes to the existing literature by investigating the personal characteristics of decision makers affecting on earnings quality while prior research focused on the firm level variables. Our findings also complement prior research in this area by providing new evidence on the role of educational background of board of directors affecting financial reporting quality that has not been investigated. Finally this paper expands the “upper echelons” perspectives into Korean companies that demographic characteristics of top management team affect on the management decision.