The spillover effects of accounting scandals in business groups
Why this work is in the frame
A frame that forgets how it found something cannot be audited. These are the routes that admitted this work.
Bibliographic record
Abstract
We show that the revelation of an accounting scandal in a member firm induces stock price declines among other member firms in the same business group. Additional evidence suggests that the spillover effects of accounting scandals are amplified when peer member firms exhibit wider deviation between the ultimate controller’s voting rights and cash flow rights, demonstrate worse accounting transparency, participate more intensively in related party transactions, and appoint more connected audit partners. Further, we find that the spillover effects subside when the peer member firms engage Big Four auditors. We also document that peer member firms that are later identified as committing accounting fraud suffer sharper stock price declines around the revelation of the initial accounting scandal in the business group. Collectively, our evidence implies that an accounting scandal at a member firm undermines the market values of peer member firms by triggering investors’ concerns about accounting fraud risk for these firms.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.033 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.003 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.001 | 0.002 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it