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CFO Age and Real Earnings Management

Authors: Zhou, Zihao;

CFO Age and Real Earnings Management

Abstract

This study examines the relationship between chief financial officer (CFO) age and real earnings management. Real earnings management is proxied by abnormal operating cash flows, abnormal production costs and abnormal discretionary expenses. Based on the extant literature, I develop two competing hypotheses in relation to CFO age and real earnings management. Using a sample of publicly listed US companies over the period from 2007 to 2018, I find a significant positive relationship between CFO age and real earnings management, implying that younger (older) CFOs engage less (more) in real earnings management. I also find that the negative relationship between younger CFO and real earnings management is more pronounced in the presence of younger CEO, CEO-chair separation and higher level of institutional ownership. Findings from the empirical analysis remain robust across alternative metrics of CFO age and real earnings management. Using two-stage least squares estimation, I show that the documented finding is not subject to the endogeneity problem. Overall, this study contributes to corporate governance literature and earnings management literature by identifying a robust relationship between CFO age and real earnings management.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
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