+1 862 207 3288 In the paper Restoring Trust After Fraud: Does Corporate Governance Matter?, authors David B. Farber explored the association between the credibility of the financial reporting system and the quality of governance mechanisms. Farber used a sample of 87 firms identified by the SEC as fraudulently manipulating their financial statements and 87 matched firms to achieve his research objectives. The first objective is to examine whether there is an association between the detection of financial reporting fraud and subsequent improvements in the quality of governance mechanisms. The second one is to exam whether these improvements aid fraud firms in restoring their reputations with informed capital market participants and recovering share values.
In the research, the author did a careful analysis of the data he collected in order to find out the difference between the data of fraud and…(short extract)
