The Effect of Managerial Adverse Experience on Financial Reporting

• 成果类型: Article
• 署名作者: Kubick, Thomas R.; Li, Yijun
• 署名单位: University of Nebraska System; University of Nebraska Lincoln; Erasmus University Rotterdam - Excl Erasmus MC; Erasmus University Rotterdam
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0325
• 发表日期: 2023
• 页码: 307-333
• 关键词: earnings management; unconditional conservatism; ceo overconfidence; corporate governance; UPPER ECHELONS; balance-sheet; Cash flows; accruals; RESTATEMENTS; style

摘要

We identify executives who have experienced significant accounting-related adverse events during their careers as a powerful setting to examine the extent to which prior professional experience can influence subsequent financial reporting policies. We find that firms led by senior financial executives who have experienced accounting-related adverse events during their careers exhibit greater unconditional accounting conservatism, a lower likelihood of experiencing future accounting-related adverse events, and less positive abnormal discretionary accruals. This effect tends to be stronger when the experience is more frequent, recent, severe, or proximate. Overall, our results reveal a meaningful relationship between managers' professional experience and accounting policies.