Beyond the CFO and Accrual Decisions: An Examination of Individual Audit Committee Chairs, CEOS, and CFOs and Their Influence on Reporting and Operating Decisions

53 Pages Posted: 15 Feb 2013

See all articles by Bradley Lawson

Bradley Lawson

Oklahoma State University - Stillwater - School of Accounting

Thomas C. Omer

University of Nebraska at Lincoln - School of Accountancy

Date Written: September 15, 2012

Abstract

We examine whether managers besides the CFO have 'styles' that affect firms’ reporting and operating decisions. Following recent studies, we develop a dataset of individual audit committee chairs, CEOs, and CFOs, that tracks their movements across firms and over time. Although audit committee chairs serve a monitoring role, research suggests that each of these management groups could exert their individual 'styles' on firms’ reporting and operating decisions. We find that each of these groups significantly affect firms’ accrual- and real activities-based decisions, even when controlling for the effect of the other groups. Also, we find the influence of these individuals is not impacted by their managerial discretion or job demands. Last, we provide evidence that certain observable demographic measures explain some of the managers’ decisions. These results add to the literature because they suggest that managers besides the CFO can significantly influence reporting and operating decisions, and the influence of these managers extends beyond accounting-based techniques to include non-accounting-based decisions.

Keywords: managerial style, audit committee chair, CEO, CFO, upper echelon

JEL Classification: G34, M12, M41

Suggested Citation

Lawson, Bradley and Omer, Thomas C., Beyond the CFO and Accrual Decisions: An Examination of Individual Audit Committee Chairs, CEOS, and CFOs and Their Influence on Reporting and Operating Decisions (September 15, 2012). Available at SSRN: https://ssrn.com/abstract=2218484 or http://dx.doi.org/10.2139/ssrn.2218484

Bradley Lawson (Contact Author)

Oklahoma State University - Stillwater - School of Accounting ( email )

College of Business Administration
415 Business Building
Stillwater, OK 74078
United States

Thomas C. Omer

University of Nebraska at Lincoln - School of Accountancy ( email )

307 College of Business Administration
Lincoln, NE 68588-0488
United States

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