Abstract

http://ssrn.com/abstract=1870373
 


 



CFO/CEO-Board Social Ties, Sarbanes Oxley, and Earnings Management


Gopal V. Krishnan


Bentley University

K. K. Raman


University of Texas at San Antonio

Ke Yang


Lehigh University

Wei Yu


Hunter College - City University of New York

March 21, 2011

Accounting Horizons, Vol. 25, No. 3. pp. 537-557, September 2011

Abstract:     
Prior research suggests that the efficacy of a formally independent member of the board of directors could be undermined by social ties with the CEO. In this study, we examine the relation between CFO/CEO-board social ties and earnings management over the 2000-2007 time period. Our results suggest that CFO/CEOs picked more socially connected directors in the post-Sarbanes Oxley Act (SOX) time period (possibly as a way out of the mandated independence requirements). Our results also suggest a positive relation between CFO/CEO-board social ties and earnings management. Still, the increase in managerial/board risk aversion since SOX appears to have negated the effect of social ties on earnings management in the post-SOX period. Board independence and financial reporting quality remain topics of ongoing interest. The study is important in advancing our understanding of the role of social ties in earnings management.

Keywords: Social network, Earnings management, SOX, CEO, CFO


Not Available For Download

Date posted: June 24, 2011 ; Last revised: September 19, 2011

Suggested Citation

Krishnan, Gopal V. and Raman, K. K. and Yang, Ke and Yu, Wei, CFO/CEO-Board Social Ties, Sarbanes Oxley, and Earnings Management (March 21, 2011). Accounting Horizons, Vol. 25, No. 3. pp. 537-557, September 2011. Available at SSRN: http://ssrn.com/abstract=1870373

Contact Information

Gopal Krishnan (Contact Author)
Bentley University ( email )
175 Forest Street
Waltham, MA 02452
United States
781-891-2477 (Phone)
K. K. Raman
University of Texas at San Antonio ( email )
One UTSA Circle
San Antonio, TX 78249
United States
210-458-8749 (Phone)
Ke Yang
Lehigh University ( email )
621 Taylor Street
Bethlehem, PA 18015
United States
6107583684 (Phone)
6107586429 (Fax)
Wei Yu
Hunter College - City University of New York ( email )
695 Park Avenue
New York, NY 10065
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,547

© 2016 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollobot1 in 0.172 seconds