Real activities and accrual earnings management in firms with General Counsel in top management
| Autor: | Ming-Ya Cheng, 鄭名雅 |
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| Rok vydání: | 2014 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 102 This paper examines the impact of general counsel on real activities earnings management and accrual earnings management. Prior evidence suggests that, when facing the heightened litigation risk, managers may choose conservative accounting choices (Bushman and Piotroski 2006). General Counsels (GCs) play a role in monitoring CEO’s unusual behavior against shareholders’ interest. Therefore, this paper examines whether general counsel affect firms’ earnings management strategies. Using a sample including firms that are suspected to have conducted earnings management, I find that GC firms engage less in real activities earnings management. Furthermore, when a GC has an additional title of corporate secretary, s/he will exert greater influence on firm’s real activities earnings management strategies. Additional tests show that there is no significant evidence to support that GC firms adjust the amount of accrual earnings management after real activities manipulation is realized. Dividing GC sample into firms whose GCs also serve as corporate secretary and firms whose GCs do not serve as corporate secretary, this study finds that firms whose GC has an additional title of secretary will use fewer amount of accrual earnings management after real activities manipulation is realized. This study attributes this finding to GCs’ litigation risk consideration when he/she is granted with more power. More interestingly, firms whose GCs have no additional corporate secretary title use more accruals to adjust the amount of earnings after real activities manipulation is realized. This suggests that these GCs are easier to compromise with other managers, and they are more like a facilitator within the organization |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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