Gambling Attitudes and Financial Misreporting

• 成果类型: Article
• 署名作者: Christensen, Dane M.; Jones, Keith L.; Kenchington, David G.
• 署名单位: University of Oregon; University of Kansas; Arizona State University; Arizona State University-Tempe
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12322
• 发表日期: 2018
• 页码: 1229-1261
• 关键词: corporate social-responsibility; risk-taking; reporting irregularities; earnings quality; Tax avoidance; FIRMS; lotteries; Managers; outcomes; MARKET

摘要

We investigate whether attitudes toward gambling help explain the occurrence of intentional misreporting. Similar to gambling, some financial reporting choices involve taking deliberate, speculative risks. We predict that in places where gambling is more socially acceptable, managers will be more likely to take financial reporting risks that increase the likelihood the financial statements will need to be restated. To test this prediction, we exploit geographic variation in local gambling attitudes and find that restatements due to intentional misreporting are more common in areas where gambling is more socially acceptable. This association is even stronger insituations where management is under greater pressure to misreport, including when the firm is close to meeting a performance benchmark, experiencing poor financial performance, or under investment-related pressure. Furthermore, these results are robust to numerous tests to address omitted variables and endogeneity. Collectively, these findings suggest gambling attitudes help explain the incidence of intentional misreporting.