Ji, Rozenbaum, and Welch (2017/2022)

Ji, Yuan, Oded Rozenbaum, and Kyle Welch. “Corporate Culture and Financial Reporting Risk: Looking Through the Glassdoor.” Working paper (University of Texas at Arlington), June 2017 (revised March 2022).

From the authors’ abstract: “We use novel data on employees’ perspectives obtained from the website Glassdoor, covering 14,282 firm-years in the period 2008-2015…. We find that firms with lower levels of job satisfaction (as measured by employees) and lower levels of “culture and values” are more likely to be subjected to SEC fraud enforcement actions and securities class action lawsuits. We also find that the association between firms’ culture and financial reporting risk is stronger for firms with weaker board independence. Thus, the work environment, as perceived by employees, appears to play a critical role in financial reporting risk..”

Link: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2945745