What Drives the Consequences of Intentional Misstatements? Evidence from Rating Analysts’ Reactions
By analyzing the content of #rating #reports, the study identifies seven different mechanisms that rating analysts are concerned about, with the most significant being the #misstatement-related violations of #debt covenants that increase #liquidityrisk and #compliancerisk. The study finds that #creditratings and #reputationalrisk of #misreporting firms are adversely affected for up to seven years after an intentional misstatement becomes publicly known. The impact of an intentional misstatement on a firm’s […]
Political Risk Management
“In the current business climate, more companies should emphasize and integrate political risk oversight in their ERM programs. Although neglecting political risk may not trigger legal liability from regulators or courts, it can cause significant financial and reputational losses to the company.” Lire
Fairness Testing: The Insurance Industry Needs to Align on Best Practices
“Social and regulatory attention has been using fairness and equity as a lens to evaluate the outcomes of existing processes like insurance underwriting. For example, a new law in Colorado, which will come into effect at the beginning of 2023, will require insurers to provide analytical evidence that their operational processes that use inputs of […]
An Inside View of Corporate ESG Practices
“Examining cyber-attacks as a shock to a firm’s incentive to appear ESG-friendly, I show that the inside measure hardly improves after the shock.” Lire