The effects of global financial crisis on the relationship between CEO compensation and earnings management

IF 4.3 Q2 MANAGEMENT

International Journal of Accounting and Information Management Pub Date : 2020-03-27 DOI:10.1108/ijaim-08-2019-0101

Oheneba Assenso-Okofo, Muhammad Jahangir Ali, Kamran Ahmed

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引用次数: 16

Abstract

This paper aims to examine the effects of global financial crisis (GFC) on chief executive officers’ (CEO) compensation and earnings management relationship. Specifically, the authors examine whether the recent financial crisis had moderated the relationship between CEO bonus and discretionary accruals.,The authors use panel data for 1,800 firm-year observations (over a period of six years from 2005 to 2010) and use univariate and multivariate tests to test their hypothesis. The authors divide the period into pre-crisis, during-crisis and post-crisis periods to examine how the different financial crisis periods affect the relationship between CEO compensation and earnings management. Various alternative tests including endogeneity test suggest that the results are robust.,The authors’ multivariate results indicate that the relationship between CEO’ compensation and earnings management changes because of the GFC.,The findings, therefore, justify more monitoring and scrutiny to limit the existence of opportunistic managerial behaviour and for the appropriate designing of CEO compensation packages during abnormal economic circumstances.,So far as the authors’ knowledge goes, this is the first study which examines the relationship between CEO compensation and earnings management during GFC.

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全球金融危机对CEO薪酬与盈余管理关系的影响

本文旨在探讨全球金融危机对首席执行官薪酬与盈余管理关系的影响。具体而言，作者考察了最近的金融危机是否缓和了CEO奖金与可自由支配应计利润之间的关系。作者使用了1800个公司年观察的面板数据(从2005年到2010年的六年期间)，并使用单变量和多变量检验来检验他们的假设。作者将这一时期分为危机前、危机中和危机后三个时期，以考察不同的金融危机时期对CEO薪酬与盈余管理之间关系的影响。包括内生性检验在内的各种替代检验表明，结果是稳健的。作者的多元结果表明，CEO薪酬与盈余管理之间的关系因全球金融危机而发生了变化。因此，调查结果证明有必要进行更多的监测和审查，以限制机会主义管理行为的存在，并在不正常的经济环境下适当设计首席执行官的薪酬方案。就作者所知，这是第一次研究全球金融危机期间CEO薪酬与盈余管理之间的关系。

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

International Journal of Accounting and Information Management MANAGEMENT-

CiteScore

7.90

自引率

3.00%

发文量

期刊介绍： The International Journal of Accounting & Information Management focuses on publishing research in accounting, finance, and information management. It specifically emphasizes the interaction between these research areas on an international scale and within both the private and public sectors. The aim of the journal is to bridge the knowledge gap between researchers and practitioners by covering various issues that arise in the field. These include information systems, accounting information management, innovation and technology in accounting, accounting standards and reporting, and capital market efficiency.