Does corporate governance make financial reports better, or just better for equity investors?

• Main Authors: Segal, Dan, Segal, Benjamin, Levi, Shai
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2014
• Subjects: Accounting; Business Law, Public Responsibility, and Ethics; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/1305; https://ink.library.smu.edu.sg/context/soa_research/article/2304/viewcontent/Does_corporate_governance_make_financial_reports_better_or_just_better_for_equity_investors.pdf
• Institution: Singapore Management University

Financial reports should provide useful information to both shareholders and creditors, according to U.S. accounting principles. However, directors of corporations have fiduciary duties only toward equity holders, and those fiduciary duties normally do not extend to the interests of creditors. We ex...