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Title: Why do CFOs become involved in material accounting manipulations?
Authors: Feng, M.
Ge, W.
Luo, S. 
Shevlin, T.
Keywords: Accounting manipulation
CEO power
CFO turnover
Earnings quality
Incentive compensation
Issue Date: 2011
Citation: Feng, M., Ge, W., Luo, S., Shevlin, T. (2011). Why do CFOs become involved in material accounting manipulations?. Journal of Accounting and Economics 51 (1-2) : 21-36. ScholarBank@NUS Repository.
Abstract: This paper examines why CFOs become involved in material accounting manipulations. We find that while CFOs bear substantial legal costs when involved in accounting manipulations, these CFOs have similar equity incentives to the CFOs of matched non-manipulation firms. In contrast, CEOs of manipulation firms have higher equity incentives and more power than CEOs of matched firms. Taken together, our findings are consistent with the explanation that CFOs are involved in material accounting manipulations because they succumb to pressure from CEOs, rather than because they seek immediate personal financial benefit from their equity incentives. AAER content analysis reinforces this conclusion. © 2010 Elsevier B.V.
Source Title: Journal of Accounting and Economics
ISSN: 01654101
DOI: 10.1016/j.jacceco.2010.09.005
Appears in Collections:Staff Publications

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