dp0609 - FEP - Universidade do Porto

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(ASSETS, SALES and MKCAP), a significant presence of outliers is apparent (e.g., EDP, Portugal Telecom, Sonae, Brisa), as the mean is substantially higher than the median. In relation to the ER variable, such difference is small, the sample only experiencing here a slight positive asymmetry. Regarding ROA, one can observe a mean asset profitability of 3%, with more than 50% of the observations exhibiting profitability ratios lower than 5%. In what concerns growth opportunities (proxied by PBV), our results show that the market prices firms’ equity at a mean (median) premium of 83% (28%) over its book value. 5.4. Group comparisons and correlation matrix In table 7 a comparison is made between the two types of auditor opinions according to a number of different variables. The results point to the inexistence of significant differences between the two groups as far as board size (NUM) or the number of board meetings (MEET) are concerned. Regarding the percentage of non-executive board members (PNEXEC), we find that the mean and median values for this variable are lower in instances where a modified opinion has been issued, but such difference is only marginally significant (p-value of 0.15). However, if one considers a one-sided test – which is justifiable on the grounds that one would expect a larger proportion of non-executive members in the clean opinion group – the difference becomes statistically significant at the 10% level (p- value
modified opinion, the difference being statistically significant. We can therefore conclude that clean opinion firms enjoy on average higher profitability and stronger equity ratios, in line with previous arguments. As far as growth opportunities are concerned, we find that the mean price-book value (PBV) of the clean opinion group is higher, but the difference is not significant in a parametric test. However, since we can reject the normality of this variable’s distribution (p-value
Page 1 and 2: DP 2006 - 09 Board Structure and Mo
Page 3 and 4: BOARD STRUCTURE AND MODIFIED AUDIT
Page 5 and 6: ecent accounting scandals, the “S
Page 7 and 8: are higher if a firm is identified
Page 9 and 10: etter judge the “the true and fai
Page 11 and 12: than other auditors, which can be i
Page 13 and 14: emphases, before the issuance, in t
Page 15 and 16: Pr ob( OPIN = 1) = F( α + β NUM +
Page 17 and 18: Asset profitability (ROA) is introd
Page 19 and 20: Given the above, our first step in
Page 21 and 22: 5. Empirical results 5.1. Auditing
Page 23 and 24: information on any executive commit
Page 25: The extant literature (e.g., Beasle
Page 29 and 30: (p-value=0.34), at the same time th
Page 31 and 32: percentage of non-executive board m
Page 33 and 34: Klein (2002a) finds evidence that a
Page 35 and 36: corporate governance reports of lis
Page 37 and 38: 26 Mota—Engil, SGPS, SA Mota-Engi
Page 39 and 40: Bradshaw, M. T., S. A. Richardson a
Page 41 and 42: Dechow, P.M. and D. J. Skinner (200
Page 43 and 44: Gaver, J. J., K. M. Gaver and J. R.
Page 45 and 46: Kang, S. and K. Sivaramakrishnan (1
Page 47 and 48: Nelson, M. W., J. A. Elliott and R.
Page 49 and 50: Teoh, S. H., I. Welch and T. J. Won
Page 51 and 52: Figure 1 - Relation between the boa
Page 53 and 54: Table 2 Sample Industry Distributio
Page 55 and 56: Variable Mean Std Dev. Quantitative
Page 57 and 58: Table 7 Mean (median) figures of va
Page 59 and 60: Table 10 Logistic regression result
Page 61 and 62: Variable Expected sign Constant ? N

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