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  1.  10
    Does the External Monitoring Effect of Financial Analysts Deter Corporate Fraud in China?Jiandong Chen, Douglas Cumming, Wenxuan Hou & Edward Lee - 2016 - Journal of Business Ethics 134 (4):727-742.
    We examine whether analyst coverage influences corporate fraud in China. The fraud triangle specifies three main factors, i.e. opportunity, incentive, and rationalization. On the one hand, analysts may reduce the fraud opportunity factor through external monitoring aimed at discouraging managerial misconduct, which can moderate agency problems. On the other hand, analysts may increase the fraud incentive factor by pressurizing managers to achieve short-term performance targets, which can exacerbate agency problem. In either case, the potential influence of analysts on the fraud (...)
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  2.  14
    Player and Referee Roles Held Jointly: The Effect of State Ownership on China’s Regulatory Enforcement Against Fraud.Wenxuan Hou & Geoff Moore - 2010 - Journal of Business Ethics 95 (S2):317-335.
    This article examines the impact of the prevailing state ownership in the Chinese stock market on corporate governance and the financial regulatory system, respectively, as the internal and external monitoring mechanisms to deter corporate fraud and protect investors. In line with the literature that state ownership exaggerates the agency problem, we find that the retained state ownership in privatised firms increases the incidence of regulatory enforcements against fraud. For the state-owned enterprises (SOEs), however, larger state ownership is associated with a (...)
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  3.  2
    Business Ethics and Finance in Greater China: Synthesis and Future Directions in Sustainability, CSR, and Fraud.Douglas Cumming, Wenxuan Hou & Edward Lee - 2016 - Journal of Business Ethics 138 (4):601-626.
    Following the financial crisis and recent recession, the center of gravity of global economic growth and competitiveness is shifting toward emerging economies. As a leading and increasingly influential emerging economy, China is currently attracting the attention of academics, practitioners, and policy makers. There has been an increase in research interest in and publications on issues relating to China within high-quality international academic journals. We therefore organized a special issue conference in conjunction with the Journal of Business Ethics in Lhasa, Tibet, (...)
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  4.  10
    CEO Accountability for Corporate Fraud: Evidence From the Split Share Structure Reform in China.Jiandong Chen, Douglas Cumming, Wenxuan Hou & Edward Lee - 2016 - Journal of Business Ethics 138 (4):787-806.
    We use institutional-related theories and a unique natural experiment that enables an exogenous test of the influence of controlling shareholders on managerial accountability to corporate fraud. In China, prior to the Split Share Structure Reform, state shareholders held restricted shares that could not be traded. This restriction mitigated state-owned enterprise controlling shareholders’ incentives to monitor managers. The data examined show the SSSR strengthens incentives of state-owned enterprise controlling shareholders to replace fraudulent management. Our findings support the view that economic incentives (...)
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  5.  2
    Do Board Secretaries Influence Management Earnings Forecasts?Lu Xing, Tinghua Duan & Wenxuan Hou - 2019 - Journal of Business Ethics 154 (2):537-574.
    The role of board secretaries is a unique institutional feature in China. Individuals in this senior executive role are responsible for coordinating information disclosure. We study the impact of board secretaries on management earnings forecasts and find that their legal expertise, accounting expertise and foreign experience help improve management earnings forecast quality. The quality of forecasts, as indicated by their occurrence, frequency, precision and accuracy, is also positively associated with the role duality and equity holdings of board secretaries and negatively (...)
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  6.  3
    The Integrity of Financial Analysts: Evidence From Asymmetric Responses to Earnings Surprises.Rui Lu, Wenxuan Hou, Henry Oppenheimer & Ting Zhang - 2018 - Journal of Business Ethics 151 (3):761-783.
    This paper investigates the integrity of financial analysts by examining their recommendation responses to large quarterly earnings surprises. Although there is no significant difference in recommendation changes between affiliated and unaffiliated analysts in response to positive earnings surprises, affiliated analysts are more reluctant than unaffiliated analysts to downgrade stock recommendations in response to negative earnings surprises. The evidence implies that conflicts of interest undermine the integrity of financial analysts. We further examine the effects of reputation concern and the Global Research (...)
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  7.  13
    Sustainable and Ethical Entrepreneurship, Corporate Finance and Governance, and Institutional Reform in China.Douglas Cumming, Wenxuan Hou & Edward Lee - 2016 - Journal of Business Ethics 134 (4):505-508.