CEO Pension and Auditors Going Concern Opinion

Park Kyung Jin, Kyoungwon Mo and Nayoung Yoon
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Park Kyung Jin: Myongji University, Postal: Myongji University
Kyoungwon Mo: Chung-Ang University, Postal: Chung-Ang University
Nayoung Yoon: Korea Advanced Institute of Science and Technology, Postal: Korea Advanced Institute of Science and Technology

International Journal of Entrepreneurship, 2018, vol. 22, issue 4

Abstract: In U.S., CEO pension is common and sizable compensation recorded as off - balance sheet liabilities before CEOs’ retirement . Also, since it becomes unplayable after bankruptcy, CEOs awarded with pension plans are known to manage their firms conservatively to prevent such bankruptcies. Therefore, it was empirically examine d how auditors consider CEO pension in determining their going - concern opinions. O ur empirical results indicate that auditors are more likely to issue nega tive going - concern opinions for firms that provide their CEOs with pension plans. The results remain robust after controlling various endogeneity issues. Overall, our findings impl y that auditors recognize CEO pensions as liabilities rather than significan tly consider how CEO pensions provide incentives for conservative firm management .

Keywords: Inside Debt; CEO Pension; Audit Opinion; Going-Concern Opinion. (search for similar items in EconPapers)
JEL-codes: M21 (search for similar items in EconPapers)
Date: 2018
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