Three essays on financial reporting quality

Abstract

This dissertation, comprising three essays, covers three distinct topics under the broad spectrum of financial reporting quality. The first essay investigates the earnings quality of private firms relative to publicly listed firms using a large data sample from India. It further explores the variations in reporting quality among private firms. This study finds that privately held firms report low qual-ity of earnings compared to publicly listed firms. Further, our findings indicate that the earnings quality among private firms is lower when such firms are sub-sidiaries of publicly listed firms. This study enriches our understanding on how ownership structure influences the reporting practices of companies. It suggests that private firms tend to report low quality of earnings owing to lower demand for better quality earnings relative to their public counterparts. We posit and find that public firms meet their reporting objectives by influencing the reporting practices of their unlisted subsidiaries. Our conclusion is consistent with the argument that it is convenient for public firms to influence the reporting choices of their private subsidiaries as the latter s reporting environment is not subject to stringent regulation or monitoring. newline