When Executives Pledge Integrity: The Effect of the Accountant's Oath on Firms' Financial Reporting

被引：0
|
作者：
Heese, Jonas [1 ]
Perez-Cavazos, Gerardo [2 ]
Peter, Caspar David [3 ]
机构：
[1] Harvard Univ, Harvard Business Sch, Accounting & Management Unit, Cambridge, MA 02138 USA
[2] Univ Calif San Diego, UCSD Rady Sch Management, Dept Accounting, San Diego, CA 92103 USA
[3] Erasmus Univ, Rotterdam Sch Management, Dept Accounting & Control, Rotterdam, Netherlands
来源：
ACCOUNTING REVIEW | 2023年 / 98卷 / 07期
关键词：
professional oath; financial reporting; accounting quality; accruals-based earnings management; rationalization of fraud; real-activities earnings management; EARNINGS MANAGEMENT; REAL ACTIVITIES; NEURAL BASIS; TRADE-OFF; OVERCONFIDENCE; INCENTIVES; CHILDREN; ACCRUALS; ETHICS; TRUTH;
D O I：
10.2308/TAR-2021-0600
中图分类号：
F8 [财政、金融];
学科分类号：
0202 ;
摘要：
We study the effect of executives' pledges of integrity on firms' financial reporting outcomes by exploiting a 2016 regulation that requires holders of Dutch professional accounting degrees to pledge an integrity oath. We identify chief executive officers (CEOs) and chief financial officers (CFOs) required to take the integrity oath and find that firms reduce income-increasing discretionary accruals after executives took the oath. These firms also reduce discretionary expenditures, indicating that oath-taking executives reduce overall earnings management and do not merely substitute accruals-based with real-activities earnings management. These effects are concentrated in firms where the CFO took the oath. Overall, our results indicate that integrity oaths for executives improve firms' financial reporting quality.
引用
收藏
页码：261 / 288
页数：28
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