Revenue Classification Shifting: Does CEO Gender Matter?

Wenjing Ouyang, Thanh Ngo () and Hongxia Wang ()
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Wenjing Ouyang: University of the Pacific, Stockton, CA 95219, USA
Thanh Ngo: East Carolina University, Greenville, NC 27858, USA
Hongxia Wang: Coastal Carolina University, Conway, SC, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2023, vol. 26, issue 01, 1-42

Abstract: Instead of managing bottom-line earnings, firms may use revenue classification shifting to inflate core earnings due to its less risky, less costly, but viable features. Female CEOs, being perceived more risk-averse and more ethical, may engage in either more or less revenue classification shifting than male CEOs. Using a sample of 36,427 US firm-year observations from 1993 to 2019, we find that female CEOs tend to engage in less revenue classification shifting than male CEOs when the monitoring environment is looser but increase revenue classification shifting when the monitoring environment becomes more stringent. Further analyses indicate that female CEOs may substitute revenue classification shifting for more costly earnings management tools under stricter monitoring. The results are robust to endogeneity tests, sample selection bias, and additional control variables, providing new evidence that female CEOs are more risk-averse.

Keywords: CEO gender; female CEOs; revenue classification shifting (search for similar items in EconPapers)
JEL-codes: G30 J16 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S0219091523500029

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