The Effect of Managerial Adverse Experience on Financial Reporting
Year: 2022
Type: article
Abstract: ABSTRACT We identify executives who have experienced significant accounting-related adverse events during their careers as a powerful setting to examine the extent to which prior professional experience can influence subsequent financial reporting policies. We find that firms led by senior financial executives who have experienced accounting-related adverse events during their careers exhibit greater unconditional accounting conservatism, a lower likelihood of experiencing future accounting-related adverse events, and less positive abnormal discretionary accruals. This effect tends to be stronger when the experience is more frequent, recent, severe, or proximate. Overall, our results reveal a meaningful relationship between managers’ professional experience and accounting policies. Data Availability: All data used in this study are obtained from publicly available sources. JEL Classifications: G40; M40; M41.
Source: The Accounting Review
Authors: Thomas R. Kubick, Yijun Li
Institutions: University of Nebraska–Lincoln, Erasmus University Rotterdam
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4291143678