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The purpose of the paper is to examine the association between the corporate ownership characteristics and the timely remediation of internal control weaknesses over financial reporting under Section 404 of the Sarbanes‐Oxley Act (SOX) of 2002.

The paper employs both ordered and binary logistic regression models for a sample of 695 US firms who reported internal control weaknesses for the first time, pursuant to SOX Section 404, and evaluates the impact of the stock ownership characteristics on the timeliness in remediation of their control weaknesses.

The test results show that the corporate ownership characteristics, as a part of governance mechanism, play an incrementally critical role to influence firms' decisions to promptly remediate their internal control problems and improve the reliability of financial information. In addition, it was also found that a corporate board independent of its CEO is effective in monitoring timely remediation of control problems. Sub‐sample analyses for the company‐level and account‐specific internal control weaknesses produce similar results in support of the effect of corporate stock ownership characteristics on the timely remediation of internal control weaknesses.

First, the paper adds to the literature by demonstrating the incremental effect of the stock ownership characteristics on a firm's timeliness in remediation of control weaknesses, even after controlling the effect of audit committee and board characteristics in the analysis. Second, the paper shows that even in the post‐SOX years with enhanced regulatory oversight in corporate affairs, the effect of corporate ownership attributes as a part of governance is incrementally observable in a situation that calls for prompt managerial action to ensure the reliability of financial information. Third, for the first time, the study makes a separate detailed analysis on the association between the stock ownership attributes and the remediation of company‐level and account‐specific control weaknesses. The results provide valuable insights into the ownership governance effect on the remediation of the two types of control weaknesses that have different rigor, auditability (more or less auditable), and effects (pervasive or non‐pervasive) on financial reporting quality. Fourth, the study further enhances one's understanding of several important governance factors that help achieve a sound financial reporting system and restore investors' confidence in the system.

This paper investigates the relationship between institutional ownership and idiosyncratic volatility in Chinese and the USA stock markets and explores the potential explanations.

In this paper, the authors use the panel data regressions and the dynamic tests of two-way Granger causality in the panel VAR model to examine the relationship between institutional ownership and idiosyncratic volatility in Chinese and the USA stock markets.

The authors find that the institutional ownership in the Chinese (the USA) stock market is significantly and positively (negatively) related to idiosyncratic volatility through various tests. This paper indicates that institutional investors in the USA are more prudent and risk-averse, while the Chinese institutional investors are not because of high risk-bearing capacity.

This paper deepens the authors’ understanding on the relationship between institutional ownership and idiosyncratic volatility and in the USA and the Chinese stock markets. This paper explains the opposite relationships between institutional ownership and idiosyncratic volatility in the stock markets in China and USA.

The purpose of this paper is to examine the association between corporate governance attributes in the form of board and ownership characteristics and the remediation of internal control material weaknesses (ICMW) reported under Section 404 of the Sarbanes‐Oxley Act (SOX) of 2002.

The paper employs multivariate logistic regression models for a sample of 528 firms having ICMW as per their auditors' attestation reports during the fiscal periods of 2004, 2005 and 2006 to investigate the empirical relationships between board and ownership characteristics, and remediation of control weaknesses in subsequent fiscal years.

The board diligence, CEO‐independent board, and managerial, institutional and dominant shareholdings are all positively and significantly associated with the ICMW remediation of the sample firms in the presence of other firm‐specific variables in the analysis. The results also suggest that, in general, the ownership characteristics play a greater role in the firms' remediation action than the board‐related factors except board diligence. The separate sub‐sample tests demonstrate that board diligence and several stock ownership characteristics are positively and significantly associated with a firm's action to remediate both the systematic and non‐systematic internal control weaknesses though the results are more robust for non‐systematic control weaknesses.

A useful extension is to conduct a detailed analysis of the effect of audit committee characteristics in conjunction with board and ownership characteristics on firms' remediation action in a setting where ICMW firms take such action at a differential pace that may continue over two or more fiscal periods. Further, the present study examines the empirical associations between variables of interest, and does not, by virtue of its results, establish any cause‐and‐effect relationship between governance attributes and timeliness in ICMW remediation. Finally, this research can be extended to a detailed analysis of the types of systematic and non‐systematic control weaknesses, their probable effect on firms' financial reporting process and the role of corporate governance in timeliness of management's remediation action for different types of internal control problems.

The paper adds to the existing literature on corporate governance and financial reporting quality by documenting the association between a firm's board and ownership characteristics and management's immediate action to remediate internal control problems that ultimately impacts the quality of reported accounting information. The study complements prior studies on ICMW remediation and accrual quality by demonstrating that the effective monitoring by board and large, sophisticated shareholders as well as greater alignment of manager‐shareholder interests ensures more timeliness in remediation of internal control weaknesses and improves financial reporting quality.

Drawing on the literature regarding the social network and stock investment, this paper aims to focus on the use of the social network on stock ownership decisions at individual levels. This paper also attempts to shed light on potential mediators of the relationship between the social network and stock ownership.

To determine the relationship between stock ownership and using the social network, logistic regression was used. In order to isolate the effect of using hs on stock ownership, a decomposing method was adopted.

The findings provide evidence of the positive contribution of the use of social networks in stock ownership. Personal characteristics, such as household net worth, homeownership, education level and risk tolerance, may play a vital role in influencing individuals' decisions regarding stock investment. In addition, this study contributes to our understanding of income's mediating role in stock investment decisions.

First, the authors contribute theoretically by drawing from the assumptions of social networking contagion theory, social influence theory, and social capital theory. Second, we explored potential mediators of the relationship between the social network and stock ownership. Third, this study complements the literature in incorporating the social network in business, financial professionals to be exact.

The purpose of the study is to examine the effect of managerial stock ownership on the relationship between material internal control weaknesses (ICW) and audit fees.

The paper uses multivariate regression analyses on a sample of 1,578 ICW and 1,578 pair-matched (based on both propensity score and managerial stock ownership) non-ICW firm observations for a period from 2004 to 2010 to investigate how managerial incentive at various stock ownership levels impacts the relationship between material ICW and audit fees.

For the firms with low managerial stock ownership (up to 5 per cent stockholdings), the authors find no significant effect of managerial ownership on the positive relationship between audit fees and ICW. However, the impact of managerial stock ownership on the relationship between ICW and audit fees is significantly positive when managerial ownership is medium, i.e. more than 5 per cent and less than or equal to 25 per cent stockholdings, and the managerial ownership effect is even higher when managerial stock ownership is high, i.e. more than 25 per cent stockholdings. The result is especially robust for the ICW firms with high managerial stock ownership (i.e. where managers hold more than 25 per cent equity stake in the firms). The additional analyses further show that this managerial ownership effect is more pronounced when the firms suffer from company-level material control weaknesses that have pervasive negative effect on financial reporting quality.

The results imply that in a low managerial ownership firms with substantial misalignment between manager and shareholder incentives, managerial stock ownership has little effect on the ICW and audit fee relationship. But when managers’ ownership interest is at a high level, they are more prone to purchase higher-quality audit service to reduce the risk of financial misstatements due to material ICW, which results in higher audit fees. The results add to the audit fee literature by suggesting that managerial incentive at various ownership levels is a critical governance factor that impacts auditor’s fee structure especially when higher reporting risk exists due to material ICW.

Prior literature documents that there is some relationship between managerial attributes and earnings quality; however, there is no substantive empirical evidence on the effect of managerial stock ownership on audit pricing when client companies face higher risk of financial misreporting as a result of material ICW. In this study, the authors seek answers to these empirical questions and fill the gap in the literature.

Using a unique dataset of ownership structure for all stocks listed on the Stockholm Stock Exchange in Sweden, we examine different degrees of institutional holdings in Swedish firms during the bear market of 2000 to 2002. We find that examination by institutional investor domicile reveals that both Swedish and foreign institutions increase their equity holdings, although the increase by foreign institutions is proportionately higher, (individuals reduce their equity holdings). We find evidence that foreign and domestic institutional investors exhibit different preferences for excess returns and standard deviations in excess returns when we control for firm size; excess return is associated with changes in foreign institutional holdings while higher standard deviation in excess return is associated with the change in domestic institutional holdings. Both types of institutions are sensitive to liquidity and trading factors, causing portfolio realignment.

Drawing on bargaining power and the inequality aversion perspective, this study aims to probe employees’ influence on addressing income inequality between top executives and nonexecutive employees. Meanwhile, it examines the moderating role of employee-related factors and plan attributes.

This study uses a staggered difference-in-differences design with a propensity scoring match approach and verification of the parallel trend assumption to test the hypotheses.

The results support the hypothesis that employee stock ownership plans (ESOPs) significantly reduce within-firm income inequality. The negative effect is amplified by both the presence of trade unions and the unemployment rate at the regional level, as well as the duration of the lock-in period and the scale of participants within the stock ownership plan.

This study has implications for income inequality research and ESOP design and provides theoretical support for policymakers and corporate governance.

This study contributes to the literature on income inequality by examining the implementation of ESOPs from the employee perspective. Furthermore, it extends the current literature by investigating the strengthening effects of regional factors and ESOP attributes on the relationship between ESOPs and income inequality. The conclusions provide new empirical evidence to promote the effective implementation of ESOPs by combining internal and external factors.

Institutional investors—insurance companies, pension funds, investment trust companies and unit trusts—have increased significantly and persistently their ownership of British industry. At the end of 1977 they owned approximately 46 per cent of the ordinary shares in UK quoted companies and in recent years have accounted for over 50 per cent of stock market turnover in UK equities. Their presence in the stock market has been associated with their ability to influence share prices, decide the outcome of takeover battles, and trade outside the London Stock Exchange. As major shareholders in public companies they have been encouraged to participate in managerial decision‐making. For corporate management, the growth of institutional shareholdings provides opportunities to utilise their voting power in takeover situations, encourage their support for the market value of the company, and use financial institutions as sources of new capital.

This study provides evidence that auditors analyzing board composition in terms of the percentage of internal directors should concurrently consider the presence of a nominating committee and management ownership, since the latter is a substitute for each of the other characteristics. Decision support tools should incorporate the alternative nature of these traits, as well as the positive relation of chairman/CEO duality, subsidiary CEO board membership, the proportion of other CEOs on a board, and institutional ownership to both accounting and market performance measures. A disproportionate share of the board as key executives of the auditee is associated with poorer performance. Since inherent risk of going concern relates to performance and such risk has implications for management control structure, auditors could improve risk assessments by considering the relative weights of corporate governance traits' association with performance. The linkage of these findings with prior literature, the use of checklists, and further research is discussed.

The separation of ownership from control in large public corporations and the resulting conflict of interest between shareholders and managers is a fundamental problem in corporate governance. From the shareholders' perspective, an effective compensation contract is one that aligns the manager's incentives with shareholder interests. Numerous studies have investigated the use of performance‐contingent compensation to achieve this linkage, as well as the use of alternative control mechanisms. This study extends this research by examining the effect of risk on the use of performance‐contingent compensation. The effect of risk on compensation contracts is of interest to accountants because of accounting's stewardship role in the organization. In particular, because significant accounting resources are directed toward corporate control, it is of interest to accountants to know when firms are likely to place more or less emphasis on performance‐contingent compensation.