CFO attributes and accounting conservatism: evidence from Malaysia

Ismail, Ismaanzira; Shafie, Rohami; Ismail, Ku Nor Izah Ku

doi:10.1108/par-07-2020-0088

Cited by 12 publications

(15 citation statements)

References 75 publications

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“…This is in comparison to 41 percent for Chinese CFOs (p=0.000), 62.5 percent for Indian CFOs (p=0.106) and 60 percent for CFOs from other ethnic groups (p=0.509). The positive impact of Malay executives, in this case CFOs, is consistent with the previous literature which found the presence/extent of Malay executives/directors led to greater voluntary disclosure (Haniffa & Cooke, 2002) and corporate social responsibility disclosure (Alazzani et al, 2019;Haniffa & Cooke, 2005), better accrual quality (Hashim, 2012), and more conservative approach in accounting (Ismail et al, 2021).…”

Section: Resultssupporting

confidence: 89%

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Chief Financial Officers and Environmental, Social and Governance: Preliminary Evidence From Malaysia

Alrazi,

Husin,

Nor

2023

European Proceedings of Finance and Economics

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Environmental, social and governance (ESG) continues to be the most significant risk facing the world in the next decade. Failure in climate change adaptation and mitigation, extreme weather, loss of biodiversity, erosion of social cohesion, livelihood crises and infectious diseases were among the major concerns being highlighted in the recent World Economic Forum's survey. Countries around the globe have been working together to address these risks by responding to the 2030 Agenda for Sustainable Development and continuous monitoring of its 17 goals since September 2015. In a similar vein, there have been many calls for the chief financial officers (CFOs) to lead their organisational journey towards sustainability. The launching of CFO Principles on Integrated SDG Investments and Finance in year 2020 and CFO Coalition for the SDGs recently have cemented the significant role of CFOs in sustainability. In Malaysia, the national accounting regulatory body -Malaysian Institute of Accountants (MIA)have set ESG high on its agenda and it is to be embraced by all its members. Drawing upon upper echelons perspective and resource-based theory, this research presents preliminary evidence on the relationship between CFO characteristics and ESG ratings among public listed companies in Malaysia. Based on the analysis of 252 companies for the year 2022, we observed the influence of CFO professional qualification, ethnicity, and tenure. This research focuses on a topic which has not been extensively investigated by the past researchers. Furthermore, it offers practical implications on matters related to CFOs in ensuring corporate sustainability.

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Section: Resultssupporting

confidence: 89%

“…denote no significant association.Apart from the studies listed in Table1, there are also empirical research in Malaysia linking CFO characteristics and earnings conservatism and quality of corporate reporting. Based on 1,004 firm-year observations,Ismail et al (2021) found the influence of CFO gender, age, education level, and ethnicity.…”

mentioning

confidence: 99%

Chief Financial Officers and Environmental, Social and Governance: Preliminary Evidence From Malaysia

Alrazi,

Husin,

Nor

2023

European Proceedings of Finance and Economics

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“…Thus, they play an important role in providing FRQ (Aier et al , 2005; Ge et al , 2011). According to research conducted by Almeida and Lemes (2020), Collier and Wilson (1994), Ismail et al (2021), Yu (2021), the characteristics, such as educational background, play an important role in making decisions regarding financial policy. Hence, this study investigates the association between a CFO’s educational background and FRQ.…”

Section: Theoretical Background and Hypothesis Developmentmentioning

confidence: 99%

“…An MBA degree is known to influence top managers' performance, as the upper echelons theory predicts that top managers' managerial backgrounds can better describe their strategic decisions and create consequences that affect organizational outcomes. Some researchers, such as Ismail et al (2021), find that CFOs with a master's degree report earnings more conservatively. Similarly, Sun et al (2021) documented that executives with MBA reporting earnings are less aggressive and conservative.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Chief financial officer’s educational background from reputable universities and financial reporting quality

Harymawan

Minanurohman

Nasih

et al. 2022

JAOC

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Purpose This study aims to examine the relationship between the educational background of Chief Financial Officers (CFOs) from reputable universities and financial reporting quality (FRQ). Educational background is divided into two categories: an undergraduate degree from a reputable university and a Master of Business Administration (MBA) degree from a reputable university. Design/methodology/approach This study uses data from all companies listed on the Indonesia Stock Exchange from 2010 to 2019, except for financial companies, and obtains 2,583 research samples. The least-squares regression analysis model was used in this study. Findings This study finds that the educational background of CFOs with a bachelor’s degree and CFOs with an MBA from reputable universities has a positive and significant relationship with FRQ. This study also performs an additional analysis with high-low growth and high-low tech and robustness testing with coarsened exact matching method and Heckman to corroborate the results. Research limitations/implications This study provides a theoretical contribution to the literature on the relationship between CFOs’ educational background and FRQ in Indonesia. It is also expected to contribute to the implementation of company policies, management and educational institutions in Indonesia. Originality/value This study provides a novel measurement of CFO reputation, measured using the ranking of CFO alumni from reputable universities and its association with FRQ.

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“…Of all senior managers, the chief financial officer (CFO) has the most impact on a firm’s financial reporting decisions (Zalata et al , 2021; Wang et al , 2021). Furthermore, regulators hold CFOs accountable for firms’ financial reports (Doan and Iskandar-Datta, 2020) as the CFO has an important responsibility for the fair presentation of the company’s financial statements and financial information (Ismail et al , 2021). However, despite the importance of CFOs in modern corporations (Xu et al , 2019), organisational researchers have largely ignored the central role of the CFO as a key decision maker (Vähämaa, 2017).…”

Section: Introductionmentioning

confidence: 99%

The incidence of accounting fraud is increasing: is it a matter of the gender of chief financial officers?

Wahyuningtyas¹,

Aisyaturrahmi

2021

JFC

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Purpose The purpose of this paper is to examine the association between accounting fraud and the gender of chief financial officers (CFOs). Design/methodology/approach This study uses a sample of US-listed firms for the period from 2000 to 2010. This paper takes this distribution of the sample observations because firms sanctioned by the Securities and Exchange Commission as reported in Accounting and Auditing Enforcement Releases for fraud are more heavily weighted in the 2000 to 2010 period. Findings This study provides considerable evidence to suggest that firms with female CFOs are negatively associated with accounting fraud. The study also suggests that in state-owned enterprises, in which political concerns are likely to be more pronounced, the relationship between female CFOs and accounting fraud is negatively less significant. This study conducts an additional test about when and why boards’ diversity reduces accounting fraud or concerns. The result shows that the structure of gender-mixed boards is better than male-only boards. Therefore, it is important to control the activities or decisions of powerful chief executive officers. Research limitations/implications In general, the findings contribute to the current discussion on the necessity of increasing gender diversity as a corporate governance mechanism. This study is specifically focussed on CFOs that may directly have important implications for financial reporting and corporate governance. Originality/value This paper extends prior research by addressing the potential effects of female CFOs on accounting fraud. For example, Zhou et al. (2018) examine the relationship between executive compensation and the incidence of corporate fraud in Chinese listed companies from the perspective of delisting pressure. The result documents that there is no a relationship between CFO gender and accounting fraud. The results, however, find that female CFOs are negatively associated with accounting fraud; meaning that the presence of female CFOs brings positive implications for financial reporting and corporate governance.

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CFO attributes and accounting conservatism: evidence from Malaysia

Cited by 12 publications

References 75 publications

Chief Financial Officers and Environmental, Social and Governance: Preliminary Evidence From Malaysia

Chief Financial Officers and Environmental, Social and Governance: Preliminary Evidence From Malaysia

Chief financial officer’s educational background from reputable universities and financial reporting quality

The incidence of accounting fraud is increasing: is it a matter of the gender of chief financial officers?

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