The effect of CEO inside debt holdings on financial reporting quality

• 成果类型: Article
• 署名作者: He, Guanming
• 署名单位: University of Warwick
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-014-9305-8
• 发表日期: 2015
• 页码: 501-536
• 关键词: earnings management; INTERNAL CONTROL; equity incentives; BONUS SCHEMES; accruals; INFORMATION; INVESTMENT; FIRMS; cost; RISK

摘要

This study investigates the effect of CEO inside debt holdings on financial reporting quality. I find that higher CEO inside debt holdings are associated with lower abnormal accruals, higher accruals quality, a lower likelihood of an earnings misstatement, and a lower incidence of earnings benchmark beating, suggesting that CEO inside debt promotes high financial reporting quality. Additional analyses reveal that (1) CEO inside debt holdings reduce firm-specific stock price crash risk, and that (2) auditors are less likely to report a material internal control weakness for firms that have large CEO inside debt.