Busy CEOs and financial reporting quality: evidence from Indonesia

IF 2.3 Q2 BUSINESS, FINANCE

Asian Review of Accounting Pub Date : 2022-06-28 DOI:10.1108/ara-11-2021-0203

I. Harymawan, M. Nasih, Nadia Klarita Rahayu, K. A. Kamarudin, Wan Adibah Wan Ismail

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引用次数: 7

Abstract

PurposeThis study aims to examine the relationship between CEO busyness and financial reporting quality in a country which implements a two-tier board system.Design/methodology/approachThis study includes firms listed on the Indonesian Stock Exchange during the 2010–2018 period. This study employs an ordinary least squares regression, the propensity score matching procedure, and a Heckman two-stage regression in testing the hypothesis.FindingsThis study finds that firms with busy directors have a higher financial reporting quality, and these results are robust to a battery or sensitivity analysis. The additional analyses also find that a busy CEO is negatively associated with the firm's financial reporting quality with decreasing income.Practical implicationsThis paper provides implications for policy-makers in the emerging market on devising policies on CEOs' appointments, especially when involving multiple directorships. Despite the general belief on the detrimental workload effects of busy directors, this study offers evidence supporting the opposite effect.Originality/valueAs many previous studies focused on the effect of director busyness on firm’s performance, this study focusses on the effect of CEO busyness on financial reporting quality. To the best of our knowledge, this study is the first to investigate this issue in an emerging market.

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忙碌的CEO与财务报告质量：来自印度尼西亚的证据

目的本研究旨在考察在一个实行双层董事会制度的国家，首席执行官的忙碌程度与财务报告质量之间的关系。设计/方法/方法本研究包括2010-2018年期间在印尼证券交易所上市的公司。本研究采用普通最小二乘回归、倾向得分匹配程序和Heckman两阶段回归来检验假设。发现这项研究发现，董事繁忙的公司财务报告质量更高，这些结果对电池或敏感性分析来说是稳健的。额外的分析还发现，随着收入的减少，忙碌的首席执行官与公司的财务报告质量呈负相关。实践启示本文为新兴市场的决策者制定CEO任命政策提供了启示，尤其是在涉及多个董事职位的情况下。尽管人们普遍认为忙碌的董事会对工作量产生有害影响，但这项研究提供了支持相反影响的证据。原创性/价值由于之前的许多研究都集中在董事忙碌对公司业绩的影响上，本研究集中在首席执行官忙碌对财务报告质量的影响上。据我们所知，这项研究是第一次在新兴市场调查这一问题。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Asian Review of Accounting BUSINESS, FINANCE-

CiteScore

3.20

自引率

25.00%

发文量

期刊介绍： Covering various fields of accounting, Asian Review of Accounting publishes research papers, commentary notes, review papers and practitioner oriented articles that address significant international issues as well as those that focus on Asia Pacific in particular.Coverage includes but is not limited to: -Financial accounting -Managerial accounting -Auditing -Taxation -Accounting information systems -Social and environmental accounting -Accounting education Perspectives or viewpoints arising from regional, national or international focus, a private or public sector information need, or a market-perspective or social and environmental perspective are greatly welcomed. Manuscripts that present viewpoints should address issues of wide interest among accounting scholars internationally and those in Asia Pacific in particular.