Is CEO Certification of Earnings Numbers Value-Relevant?

32 Pages Posted: 25 Apr 2007 Last revised: 12 May 2014

See all articles by Utpal Bhattacharya

Utpal Bhattacharya

HKUST Business School

Peter Groznik

University of Ljubljana - Faculty of Economics

Bruce Haslem

Southern Utah University - Department of Economics and Finance

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Abstract

On June 27, 2002, the Securities and Exchange Commission of the United States ordered the CEOs and CFOs of 688 large firms to certify the earnings numbers of their companies by 5:30PM EST, August 14, 2002. This paper uses this natural experiment to find that certification was not only a non-event for the certifiers around their certification date, but it was also a non-event for the non-certifiers around August 15, 2002. Further tests make us conclude that CEO's certification of earnings numbers is not value-relevant.

Keywords: corporate governance, earnings transparency, CEO certification, credible signal, accounting regulation, Sarbanes-Oxley Act

JEL Classification: G34, G38, D84, M41, G12

Suggested Citation

Bhattacharya, Utpal and Groznik, Peter and Haslem, Bruce, Is CEO Certification of Earnings Numbers Value-Relevant?. Journal of Empirical Finance, Forthcoming, FSU College of Law, Law, Business & Economics Paper No. #, Available at SSRN: https://ssrn.com/abstract=982467

Utpal Bhattacharya (Contact Author)

HKUST Business School ( email )

Clear Water Bay
Kowloon
Hong Kong

Peter Groznik

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia

Bruce Haslem

Southern Utah University - Department of Economics and Finance ( email )

Cedar City, UT 84720
United States

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