Open Access. Powered by Scholars. Published by Universities.®
- Institution
- Publication
- Publication Type
Articles 1 - 5 of 5
Full-Text Articles in Business
The Effect Of Creative Culture On Aggressive Financial Reporting, Ryan Guggenmos
The Effect Of Creative Culture On Aggressive Financial Reporting, Ryan Guggenmos
Doctoral Dissertations
Chief Executive Officers identify creativity as the leadership competency most desired in business today (IBM 2010). As companies recognize the benefits of creativity and innovation, managers are increasingly looking to build creative cultures within their organizations. However, research in psychology suggests that there may be unintended negative consequences to these attempts. In this study, I predict and find that innovative company culture primes creative thought and, in turn, leads to higher levels of real earnings management (REM) behaviors. Using construal level theories of psychological distance proposed by Trope and Liberman (2010), I design and test both a lower-level and a …
Does Increased Board Independence Reduce Earnings Management? Evidence From Recent Regulatory Reforms, Qiang Cheng, Xia Chen, Xin Wang
Does Increased Board Independence Reduce Earnings Management? Evidence From Recent Regulatory Reforms, Qiang Cheng, Xia Chen, Xin Wang
Research Collection School Of Accountancy
In this paper, we examine whether recent regulatory reforms requiring majority board independence are effective in reducing earnings management. Firms that did not have a majority of independent directors prior to the reforms (referred to as non-compliance firms) are required to increase their board independence. We find that overall, compared to the other firms, noncompliance firms do not experience a significant decrease in the extent of earnings management from prior to the reforms to afterwards. However, we find that non-compliance firms with low information acquisition cost experience a significant reduction in earnings management compared with the other firms. The results …
Does Increased Board Independence Reduce Earnings Management? Evidence From The Recent Regulatory Reform, Xia Chen, Qiang Cheng, Xin Wang
Does Increased Board Independence Reduce Earnings Management? Evidence From The Recent Regulatory Reform, Xia Chen, Qiang Cheng, Xin Wang
Research Collection School Of Accountancy
We examine whether recent regulatory reforms requiring majority board independence reduce the extent of earnings management. Firms that did not have a majority of independent directors before the reforms (referred to as noncompliant firms) are required to increase their board independence. We find that, while noncompliant firms on average do not experience a significant decrease in earnings management after the reforms compared to other firms, noncompliant firms with low information acquisition cost experience a significant reduction in earnings management. The results are similar when we examine audit committee independence and when we use alternative proxies for information acquisition cost and …
Ceo Equity Incentives And Audit Fees, Yongtae Kim, Haidan Li, Siqi Li
Ceo Equity Incentives And Audit Fees, Yongtae Kim, Haidan Li, Siqi Li
Accounting
This study examines whether CEO equity incentives have an impact on audit pricing. Prior studies investigate whether CEO equity incentives motivate executives to manage earnings for personal financial gains. Our focus is on whether auditors perceive CEO equity incentives to be associated with greater earnings manipulation risk and incorporate such risk in their pricing decisions. We find that CEO equity portfolio vega is positively related to audit fees after controlling for other determinants of audit fees, while equity portfolio delta is not significantly related to audit fees. This result holds after we account for potential endogeneity. The evidence suggests that …
10b5-1 Plans And Earnings Management By High-Level Executives, Joshua A. Thomas
10b5-1 Plans And Earnings Management By High-Level Executives, Joshua A. Thomas
CMC Senior Theses
Using historical firm financial and insider trading information, this paper examines whether high-level insiders manipulate earnings ahead of their own 10b5-1 equity transactions. The empirical evidence suggests that high-level executives appear to manipulate earnings through real activities such as abnormal discretionary expenditures and abnormal cash flows from operations to influence equity prices ahead of their own transactions under Rule 10b5-1. Evidence also suggests that executives appear to be unlikely to engage in earnings management through highly scrutinized means such as accruals. An interpretation of these results is that high-level executives may be using 10b5-1 plans as an offensive tool to …