The effect of CEO inside debt holdings on financial reporting quality

• Autores: Guanming He
• Localización: Review of Accounting Studies, ISSN-e 1573-7136, Vol. 20, Nº. 1, 2015, págs. 501-536
• Idioma: inglés
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• Resumen

  • This study investigates the effect of CEO inside debt holdings on financial reporting quality. I find that higher CEO inside debt holdings are associated with lower abnormal accruals, higher accruals quality, a lower likelihood of an earnings misstatement, and a lower incidence of earnings benchmark beating, suggesting that CEO inside debt promotes high financial reporting quality. Additional analyses reveal that (1) CEO inside debt holdings reduce firm-specific stock price crash risk, and that (2) auditors are less likely to report a material internal control weakness for firms that have large CEO inside debt.