An accounting educated CEO’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / Yvonne Joseph Ason

This study focuses on the area of corporate governance, particularly looking at the relationship between CEO with accounting background towards earnings management and accounting conservatism. Motivated by the unexplained trend of companies in the developed countries to hire individuals with account...

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Main Author:	Joseph Ason, Yvonne
Format:	Thesis
Language:	English
Published:	2021
Subjects:	Accounting Bookkeeping
Online Access:	https://ir.uitm.edu.my/id/eprint/61179/1/61179.pdf
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id	my-uitm-ir.61179
record_format	uketd_dc
spelling	my-uitm-ir.611792022-09-26T08:21:42Z An accounting educated CEO’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / Yvonne Joseph Ason 2021-08 Joseph Ason, Yvonne Accounting. Bookkeeping This study focuses on the area of corporate governance, particularly looking at the relationship between CEO with accounting background towards earnings management and accounting conservatism. Motivated by the unexplained trend of companies in the developed countries to hire individuals with accounting background to hold a post as Chief Executive Officer (CEO) after the introduction of the Sarbanes Oxley Act in 2002, this study attempts to examine empirically the effectiveness of the CEOs with accounting backgrounds in curbing the earnings management activities. This study also examines the accounting conservatism of CEOs with accounting backgrounds based on the findings from prior studies which suggested that CEOs with accounting backgrounds possess a higher level of accounting conservatism. Furthermore, this study examines the moderating role of the executive compensation towards; firstly, the relationship between CEO’s accounting background and earnings management; secondly, the relationship between CEO’s accounting background and accounting conservatism. Using the data from 71 companies from the Malaysian FTSE top 100 companies that fulfilled the requirement to become the sample, this study provides evidence from the perspective of developing countries. Earnings management is represented by discretionary accruals estimated using Modified Jones (1991) model and Performance – Matching model by Kothari (2005). For the proxy of accounting conservatism, this study uses the estimation of C-Score following Basu (1997). All financial data were downloaded through the DataStream Software by Thompson One Banker, while the data for CEOs’ education backgrounds, CEOs’ demographic backgrounds, and other corporate governance variables were collected manually from the companies’ annual reports. The regression results of this study suggest that CEOs with accounting backgrounds are indeed conservative as compared to their non-accounting educated counterparts. Unfortunately, there is no evidence found on the effectiveness of CEOs with accounting background in curbing the earnings management activity, neither the role of executive compensation in influencing the relationship between CEO’s accounting background towards earnings management and accounting conservatism. The finding of this study is meaningful in a way that it highlighted the successful learning outcome at the tertiary level in producing accounting graduates that are hopeful to practice conservative accounting in an effort to provide more reliable accounting information to the wide range of users of financial information. 2021-08 Thesis https://ir.uitm.edu.my/id/eprint/61179/ https://ir.uitm.edu.my/id/eprint/61179/1/61179.pdf text en public phd doctoral Universiti Teknologi MARA Arshad Ayub Graduate Business School Bujang, Imbarine (Professor Dr.)
institution	Universiti Teknologi MARA
collection	UiTM Institutional Repository
language	English
advisor	Bujang, Imbarine (Professor Dr.)
topic	Accounting Bookkeeping
spellingShingle	Accounting Bookkeeping Joseph Ason, Yvonne An accounting educated CEO’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / Yvonne Joseph Ason
description	This study focuses on the area of corporate governance, particularly looking at the relationship between CEO with accounting background towards earnings management and accounting conservatism. Motivated by the unexplained trend of companies in the developed countries to hire individuals with accounting background to hold a post as Chief Executive Officer (CEO) after the introduction of the Sarbanes Oxley Act in 2002, this study attempts to examine empirically the effectiveness of the CEOs with accounting backgrounds in curbing the earnings management activities. This study also examines the accounting conservatism of CEOs with accounting backgrounds based on the findings from prior studies which suggested that CEOs with accounting backgrounds possess a higher level of accounting conservatism. Furthermore, this study examines the moderating role of the executive compensation towards; firstly, the relationship between CEO’s accounting background and earnings management; secondly, the relationship between CEO’s accounting background and accounting conservatism. Using the data from 71 companies from the Malaysian FTSE top 100 companies that fulfilled the requirement to become the sample, this study provides evidence from the perspective of developing countries. Earnings management is represented by discretionary accruals estimated using Modified Jones (1991) model and Performance – Matching model by Kothari (2005). For the proxy of accounting conservatism, this study uses the estimation of C-Score following Basu (1997). All financial data were downloaded through the DataStream Software by Thompson One Banker, while the data for CEOs’ education backgrounds, CEOs’ demographic backgrounds, and other corporate governance variables were collected manually from the companies’ annual reports. The regression results of this study suggest that CEOs with accounting backgrounds are indeed conservative as compared to their non-accounting educated counterparts. Unfortunately, there is no evidence found on the effectiveness of CEOs with accounting background in curbing the earnings management activity, neither the role of executive compensation in influencing the relationship between CEO’s accounting background towards earnings management and accounting conservatism. The finding of this study is meaningful in a way that it highlighted the successful learning outcome at the tertiary level in producing accounting graduates that are hopeful to practice conservative accounting in an effort to provide more reliable accounting information to the wide range of users of financial information.
format	Thesis
qualification_name	Doctor of Philosophy (PhD.)
qualification_level	Doctorate
author	Joseph Ason, Yvonne
author_facet	Joseph Ason, Yvonne
author_sort	Joseph Ason, Yvonne
title	An accounting educated CEO’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / Yvonne Joseph Ason
title_short	An accounting educated CEO’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / Yvonne Joseph Ason
title_full	An accounting educated CEO’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / Yvonne Joseph Ason
title_fullStr	An accounting educated CEO’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / Yvonne Joseph Ason
title_full_unstemmed	An accounting educated CEO’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / Yvonne Joseph Ason
title_sort	accounting educated ceo’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / yvonne joseph ason
granting_institution	Universiti Teknologi MARA
granting_department	Arshad Ayub Graduate Business School
publishDate	2021
url	https://ir.uitm.edu.my/id/eprint/61179/1/61179.pdf
_version_	1783735224130076672

An accounting educated CEO’s relationship with earnings management and accounting conservatism, and the moderating role of executive compensation / Yvonne Joseph Ason

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