The effect of CEO inside debt holdings on financial reporting quality

Guanming He ()
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Guanming He: University of Warwick

Review of Accounting Studies, 2015, vol. 20, issue 1, No 16, 536 pages

Abstract: Abstract This study investigates the effect of CEO inside debt holdings on financial reporting quality. I find that higher CEO inside debt holdings are associated with lower abnormal accruals, higher accruals quality, a lower likelihood of an earnings misstatement, and a lower incidence of earnings benchmark beating, suggesting that CEO inside debt promotes high financial reporting quality. Additional analyses reveal that (1) CEO inside debt holdings reduce firm-specific stock price crash risk, and that (2) auditors are less likely to report a material internal control weakness for firms that have large CEO inside debt.

Keywords: CEO inside debt holdings; Abnormal accruals; Accruals quality; Earnings misstatement; Earnings target beating (search for similar items in EconPapers)
JEL-codes: G32 M41 M52 (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s11142-014-9305-8

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