Does Executive Compensation Affect Accounting Irregularities? Evidence From Listed Firms in Indonesia

Gatot Soepriyanto, Engkos Achmad Kuncoro, Arfian Erma Zudana and Livia Averine

SAGE Open, 2022, vol. 12, issue 3, 21582440221111109

Abstract: This research examined the association between executive compensation and accounting irregularities in Indonesia. Employing 1,100 firm-year observations during 2014 to 2017 period, we found that executive compensation is positively associated with accounting irregularities. This result is robust after we mitigated a serial order correlation of accounting irregularities and a self-selection bias using propensity score matching. We also discovered a positive relationship after considering alternative measures of accounting irregularities. Furthermore, we documented that the positive association between executive compensation and accounting irregularities is stronger for firms with higher board independence. Our findings provide important insights for regulators and Asian emerging market regulators who are considering promoting equity incentives for listed firms.

Keywords: executive compensation; accounting irregularities; board independence; CEO compensation; emerging markets (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/21582440221111109 (text/html)

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:sae:sagope:v:12:y:2022:i:3:p:21582440221111109

DOI: 10.1177/21582440221111109

Access Statistics for this article

More articles in SAGE Open
Bibliographic data for series maintained by SAGE Publications ().