Prior literature often distinguishes between insiders and gray affiliated directors
(e.g., Vicknair et al. 1993; Wright 1996). To this point, we have treated affiliated directors
as a single class, consistent with regulators’ current concern that neither inside directors
nor gray directors are independent of management. As additional analyses, we consider
the relation between auditor reporting behavior and the percentage of: (1) inside directors,
and (2) gray directors