Do Firms Mimic Industry Leaders' Accounting? Evidence from Financial Statement Comparability

• 成果类型: Article
• 署名作者: De Franco, Gus; Hou, Yu; Ma, Mark (Shuai)
• 署名单位: Tulane University; Queens University - Canada; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2019-0405
• 发表日期: 2023
• 页码: 125-148
• 关键词: INTERORGANIZATIONAL IMITATION; ceo overconfidence; Isomorphism; performance; corporations; uncertainty; incentives; legitimacy; Managers; ability

摘要

Following management theory on organizational legitimacy, we predict that managers mimic the accounting of industry-leading companies to gain legitimacy. Such demand for legitimacy is expected to be greater for new managers because stakeholders are more uncertain about the managers' ability. Using a sample of CEO turnovers, we find that a firm increases financial statement comparability with industry leaders after the new CEO assumes office. This relation is stronger when (1) new managers lack executive experience at larger firms, are younger, or belong to an underrepresented group (i.e., are female or nonwhite); (2) networks that facilitate imitation are more intense, such as when firms and peers are located in the same metropolitan statistical area (MSA) and when they share auditors or blockholders; and (3) firms' operating environments are more volatile. These findings support the idea that CEOs' demand for legitimacy leads to more comparable accounting.