Mandatory restatement, family dominance and management turnover: the evidence from an emerging economy

Due to the uniqueness of mandatory restatements, this paper examines whether family dominance affects the relationship between mandatory restatements and management turnover in an emerging economy – Taiwan. This paper adopts logistic regression models along with reporting the marginal effect of all explanatory variables to examine management turnover in different years around the year of mandatory restatement announcement. The findings show that family directorship weakens the positive relationship between mandatory restatements and management turnover in one year after the year of mandatory restatement announcement whereas do not show that family shareholding can affect the above relationship in any observed years. The findings have essential policy implications for security regulators and firms to strengthen family governance practices and financial reporting quality.