Management reputation for credible financial reporting

Harald Amberger and Phillip C. Stocken

No 301, arqus Discussion Papers in Quantitative Tax Research from arqus - Arbeitskreis Quantitative Steuerlehre

Abstract: We examine how a CEO develops a reputation for credible financial reporting and how this reputation influences investor reactions to earnings announcements. We find that investors discount earnings news when CEOs have both strong incentives to misreport and weak reporting reputations. Further, we show that the reputation for reporting integrity is CEO-specific- a firm can restore its reputation for credible financial reporting by appointing a new CEO. Disclosures about discretionary accruals, like the allowance for doubtful accounts, play a key role in shaping these reputations. Our findings underscore the importance of ethical reporting.

Keywords: Credible financial reporting; earnings manipulation; reputation (search for similar items in EconPapers)
JEL-codes: G14 J63 M40 M41 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-acc and nep-lab
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/323940/1/1933006218.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:arqudp:323940

Access Statistics for this paper

More papers in arqus Discussion Papers in Quantitative Tax Research from arqus - Arbeitskreis Quantitative Steuerlehre
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().