Gender Differences in Financial Reporting Decision-Making: Evidence from Accounting Conservatism

61 Pages Posted: 11 Jan 2014 Last revised: 29 Sep 2015

See all articles by Bill Francis

Bill Francis

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology

Iftekhar Hasan

Fordham University - Gabelli School of Business; Bank of Finland

Jong Chool Park

University of South Florida - School of Accountancy

Qiang Wu

Rensselaer Polytechnic Institute (RPI) - Lally School of Management

Multiple version iconThere are 4 versions of this paper

Date Written: January 10, 2014

Abstract

​This paper investigates the effect of CFO gender on corporate financial reporting decision-making. Focusing on firms that experience changes of CFO from male to female, the paper compares the firms’ degree of accounting conservatism between pre- and post-transition periods. We find that female CFOs are more conservative in their financial reporting. In addition, we find that the relation between CFO gender and conservatism varies with the levels of various firm risks such as litigation risk, default risk, systematic risk, and CFO specific risk such as job security risk. We further find that risk-aversion of female CFOs is associated with less equity-based compensation, lower firm risk, higher tangibility level, and lower dividend payout level. Overall, the study provides strong support for the notion that female CFOs are more risk averse than male CFOs, which leads female CFOs to adopt more conservative financial reporting policies.

Keywords: accounting conservatism, gender, CFO, risk-aversion

JEL Classification: M41, J16

Suggested Citation

Francis, Bill and Hasan, Iftekhar and Park, Jong Chool and Wu, Qiang, Gender Differences in Financial Reporting Decision-Making: Evidence from Accounting Conservatism (January 10, 2014). Contemporary Accounting Research, Vol. 32, No. 3, 2015; Bank of Finland Research Discussion Paper No. 1/2014. Available at SSRN: https://ssrn.com/abstract=2377312 or http://dx.doi.org/10.2139/ssrn.2377312

Bill Francis

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology ( email )

110 8th St
Troy, NY 12180
United States

Iftekhar Hasan

Fordham University - Gabelli School of Business ( email )

Rose Hill Campus Bronx
New York, NY 10458
United States

Bank of Finland ( email )

P.O. Box 160
Helsinki 00101
Finland

Jong Chool Park

University of South Florida - School of Accountancy ( email )

4202 E. Fowler Avenue, BSN 3403
Tampa, FL 33620-5500
United States

Qiang Wu (Contact Author)

Rensselaer Polytechnic Institute (RPI) - Lally School of Management ( email )

110 8th St
Troy, NY 12180
United States
518-276-3338 (Phone)
518-276-8661 (Fax)

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