Association between having a CA(SA) as CEO and accruals quality

Elizabeth Mey and Marna de Klerk

Meditari Accountancy Research, 2015, vol. 23, issue 3, 276-295

Abstract: Purpose - – The purpose of this paper is to examine whether Chartered Accountants South Africa (CAs(SA)) as Chief Executive Officers (CEOs) have an association with accruals quality. Design/methodology/approach - – The theoretical base of this paper is the link between accounting expertise and accruals quality. The sample consists of 812 observations of Johannesburg Stock Exchange (JSE)-listed firms between 2010 and 2013. The association is tested by regressing the CA(SA) as CEO interest variable and control variables on accruals quality, using three metrics of abnormal accruals. Findings - – The overall results suggest that less accruals management and estimation error is present when the CEO is a CA(SA). Originality/value - – This is the first study to test the association between having a CEO with a professional accounting qualification, such as CA(SA), and accruals quality. The findings will be of interest to shareholders and top executives when evaluating the appointment of a CEO.

Keywords: Earnings management; South Africa; Accounting expertise; Accounting quality; Accruals quality; CA(SA) (chartered accountant South Africa); CEO (chief executive officer); SAICA (South African institute of chartered accountants); M410 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eme:medarp:v:23:y:2015:i:3:p:276-295

DOI: 10.1108/MEDAR-09-2014-0056

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