CFOs and CEOs: Who have the most influence on earnings management?

• 成果类型: Article
• 署名作者: Jiang, John (Xuefeng); Petroni, Kathy R.; Wang, Isabel Yanyan
• 署名单位: Michigan State University; Michigan State University's Broad College of Business
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.02.007
• 发表日期: 2010
• 页码: 513-526
• 关键词: compensation; earnings management; equity incentives; CFO

摘要

This study examines the association between chief financial officer (CFO) equity incentives and earnings management. Chief executive officer (CEO) equity incentives have been shown to be associated with accruals management and the likelihood of beating analyst forecasts (Bergstresser and Philippon, 2006; Cheng and Warfield, 2005). Because CFOs' primary responsibility is financial reporting. CFO equity incentives should play a stronger role than those of the CEO in earnings management. We find that the magnitude of accruals and the likelihood of beating analyst forecasts are more sensitive to CFO equity incentives than to those of the CEO. Our evidence supports the Securities and Exchange Commission's (SEC) new disclosure requirement on CFO compensation. (C) 2010 Elsevier B.V. All rights reserved.