Abstract
Do CEO Characteristics Impact a Company's Earnings Quality?
Highlights
Disclosing corporate information in the form of financial reporting and earnings quality are important for large companies, as it contributes to the constant growth and development of the business, and along with increasing the interest from outsiders, it increases consumer and government confidence in the activities of this company (McNichols and Stubben, 2008; Cutillas et al, 2014)
There is a significant influence of both chief executive officer and earnings quality on the company's financial activities, so in this paper we determine the impact of Chief executive officer (CEO) characteristics on the earnings quality
A distinctive feature and novelty of this paper is the analysis of results for different markets, using different approaches for measuring earnings quality, along with the inclusion of a series of CEO characteristics which have not previously been researched by scientists (CEO experience, number of Board positions held by a CEO or simultaneously acting as a CFO, CEOpromoted from within, and the number of times that a CEO changes within a company)
Summary
Disclosing corporate information in the form of financial reporting and earnings quality are important for large companies, as it contributes to the constant growth and development of the business, and along with increasing the interest from outsiders, it increases consumer and government confidence in the activities of this company (McNichols and Stubben, 2008; Cutillas et al, 2014). Only a small number of scientific papers on the relationship between the earnings quality and certain personal characteristics of management and chief executive officer’s (further – CEO) have ever been presented (Francis et al, 2008; Schrand and Zechman 2009). There are many different approaches to measuring the quality of financial statements. The first model of measuring earnings quality (accrual model) was developed by Jones (1991). To test the effect of managerial abilities on earnings quality, researchers often use different CEO characteristics (Francis et al, Zang, 2008), executive overconfidence (Schrand and Zechman 2009), and financial expertise
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