Do CEOs influence CFOs’ equity incentives to manage earnings?

  • Ruonan Liu University of the Pacific

Abstract

This study examines whether CEOs’ incremental equity incentives relative to CFOs (i.e., the gap between CEO equity incentives and CFO equity incentives) and CEO power constrain or exacerbate CFOs' equity incentives to manage earnings. In most companies, CEOs own more equity than CFOs and may pressure CFOs to engage in earnings management. I find no evidence that CEO incremental equity incentives or CEO power affect the association between CFOs’ equity incentives and earnings management. In addition, I find that CFOs’ equity incentives mitigate real earnings management activities, which can help align the interests of CFOs with shareholders.

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References

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Published
2022-11-27
How to Cite
LIU, Ruonan. Do CEOs influence CFOs’ equity incentives to manage earnings?. Journal of Accounting, Business and Management (JABM), [S.l.], v. 29, n. 2, p. 22-42, nov. 2022. ISSN 2622-2167. Available at: <http://journal.stie-mce.ac.id/index.php/jabminternational/article/view/588>. Date accessed: 05 feb. 2023. doi: https://doi.org/10.31966/jabminternational.v29i2.588.
Section
Articles