Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 5, 2022 erstellt
Beschreibung:
Treating receipt of a national-level CFO award as a shock to job-market status, I use a regression discontinuity design (RDD) to investigate the role of the CFO labor market in enhancing financial reporting quality. Compared to nominees who came close to winning the award, awardee CFOs have a significantly higher chance of gaining a promotion both outside and within their firms after award events. Consistent with the notion that a shift in bargaining power from CEOs to CFOs may serve to mitigate earnings management, I find that in the first two years after receiving the award, awardee firms have a substantially smaller magnitude of discretionary accruals than do non-winner nominees. This effect is significant only in firms with powerful CEOs. Moreover, I find no evidence that receipt of the award triggers an increase in real earnings management in awardee firms. Overall, my findings suggest that ensuring career opportunities for CFOs and the consequent balance of power between CEOs and CFOs positively impact the quality of financial reporting