Financial misconduct and employee mistreatment: Evidence from wage theft

• 成果类型: Article
• 署名作者: Raghunandan, Aneesh
• 署名单位: University of London; London School Economics & Political Science
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-021-09602-y
• 发表日期: 2021
• 页码: 867-905
• 关键词: earnings management; equity incentives; real; QUALITY; proxies

摘要

I examine the relation between firms' financial conduct and wage theft. Wage theft represents the single largest form of theft committed in the United States and primarily affects firms' most vulnerable employees. I show that wage theft is more prevalent (i) when firms just meet or beat earnings targets and (ii) when executives' personal liability for wage theft decreases. Wage theft precedes financial misconduct while the theft is undetected, but once firms are caught engaging in wage theft they are more likely to shift to engaging in financial misconduct. My findings highlight an economically meaningful yet previously undocumented way in which firms' financial incentives relate to employee treatment.