We empirically investigate the relation between certain corporate governance mechanisms and the likelihood of a company having a serious accounting problem, as evidenced by a misstatement of its earnings. The specific corporate governance issues that we analyze are board and audit committee independence, the use of independent directors with financial expertise on the board or audit committee, conflicts of interest faced by outside auditors providing consulting services to the company, membership of independent directors with large blockholdings on the board or audit committee, and the influence of the chief executive officer (CEO) on the board. To our knowledge, this is the first empirical study to analyze the relation between corporate.
