<scp>CEO</scp> Network Centrality and the Likelihood of Financial Reporting Fraud

Chahine, Salim; Fang, Yiwei; Hasan, Iftekhar; Mazboudi, Mohamad

doi:10.1111/abac.12219

Cited by 14 publications

(15 citation statements)

References 79 publications

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“…We include Firm size , which is the logarithm of a company's total assets because small firms are less prone to conduct fraud, while large firms are more likely to engage in serious deception of financial reporting to accomplish their financial goals (Chen et al , 2021; Chahine et al , 2021). We include Return on assets , which is measured as net income over total assets, to control for firm profitability and accounting performance (Amiram et al , 2020; Dimitras et al , 2015; Chang and Stone, 2019).…”

Section: Methodsmentioning

confidence: 99%

Are female CFOs more ethical to the occurrences of financial reporting fraud? Theoretical and empirical evidence from cross-listed firms in the US

Maulidi

Shonhadji²,

Fachruzzaman³

et al. 2022

JFC

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Purpose The purpose of this study is to examine whether female chief financial officers (CFOs) are associated with the occurrences of financial reporting fraud. This study offers new theoretical and empirical evidence on whether firms with more female CFOs are more (less) likely to engage in financial reporting fraud. Design/methodology/approach This study is based on a sample of US-listed firms from 2011 to 2021. The authors speculate that female CFOs play a weaker role in the occurrences of financial reporting fraud. So, firms with a proportional number of female CFOs should be less likely to commit financial reporting fraud. Findings The data provide support for the predictions of this study. This study suggests a negative and significant association between the dummy variables for female CFOs and the occurrences of financial reporting fraud. The authors find that this association is contingent on governance mechanisms [e.g. ownership structure, politically connected CEOs and firms' conditions that do (or do not) invest in a gender-diverse board]. Originality/value This study offers different perspectives on the impact of female CFOs on the occurrences of financial reporting fraud. The results of this study are distinguishable from prior studies. This study moves the analytical focus from the macro level (gender diversity or female corporate leaders) to the micro level (female CFOs) to understand firms' propensity to commit financial reporting fraud. Additionally, this study is based on factual financial reporting fraud cases, considering the US firms' fraud characteristics.

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Section: Methodsmentioning

confidence: 99%

Are female CFOs more ethical to the occurrences of financial reporting fraud? Theoretical and empirical evidence from cross-listed firms in the US

Maulidi

Shonhadji²,

Fachruzzaman³

et al. 2022

JFC

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“…Empirical investigations closely associated with our study provide very limited and inconclusive findings about the implication of CEOs with high prestige on earnings quality. A few studies showed evidence that CEOs with greater connections maintain a high quality of accrual earnings [85,92], and these CEOs are associated with minimal fraudulent incidents [93]. However, some other studies demonstrate a positive association between well-connected CEOs and earnings management [88,91,94].…”

Section: Prestigious Ceos and Earnings Qualitymentioning

confidence: 99%

Do powerful CEOs matter for earnings quality? Evidence from Bangladesh

2023

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This study investigates the effects of powerful Chief Executive Officers (CEOs) on earnings quality in a setting where CEOs have strong dominance over other top executives and occasionally attempt to exert their influence over corporate regulatory bodies. Using 10-year longitudinal data for the period from 2010 to 2019 and 1,395 firm-year observations from listed non-financial firms in Bangladesh, we found that CEOs’ political power and CEOs with high structural and expert power have a significant detrimental effect on earnings quality. Ownership and prestige power have an insignificant impact on earnings quality. These powerful CEOs use accrual and real activity manipulation techniques together to manage the earnings. This study uses the system-generalized method of moment estimates for estimation purposes, and the results remain robust when alternative earnings quality proxies are used. Taken together, our results suggest that CEOs’ political duality (i.e., serving simultaneously as a member of parliament and a CEO) should be restricted and that a CEO’s tenure should be limited to a reasonable period. This research adds to the existing body of knowledge by offering empirical support for CEO power dynamics on earnings quality, specifically political and prestige power.

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“…The Institute of Internal Auditors (IAI, 2020) indica que la función de Auditoría Interna debe trabajar en cinco componentes clave en su modelo de control interno, los cuales son: i) ambiente de control, ii) evaluación de riesgos, iii) actividades de control, iv) información y comunicación, y v) actividades de monitoreo o supervisión. Estos elementos deben coordinarse para que la función de gestión de riesgos financieros y tecnológicos aseguren eficaz y efectivamente a las organizaciones (De La Torre y Quiroz, 2020; Ge et al, 2020;Chahine et al, 2021).…”

Section: Control Interno Como Mecanismo De Aseguramientounclassified

Ciberdelito y su asociación en el cometimiento de fraudes financieros en la pandemia de la COVID-19

Lascano¹,

Peña²

2023

RVG

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La COVID-19 afectó a millones de personas y organizaciones de todos los sectores y clases sociales, coadyuvando a que proliferen riesgos sociales, económicos, tecnológicos y financieros, incrementándose en el ámbito organizacional el ciberdelito y el fraude financiero. Estas actividades ilícitas tomaron protagonismo debido a la adopción de medios digitales que las organizaciones utilizaron para poder continuar con sus operaciones. Por ello, el objetivo de esta investigación fue evaluar la percepción del ciberdelito y del fraude financiero en organizaciones del sector público y privado ecuatoriano en la COVID-19. Para esto, se realizó un estudio de tipo descriptivo, bajo un enfoque cuantitativo de corte transversal, utilizando el estadístico chi-cuadrado como medio de asociación de las variables. Los resultados demostraron que la manipulación de datos económicos y estafas fue el principal ciberdelito incurrido durante la pandemia, siendo el fraude a los estados financieros el mayor esquema ejecutado por los perpetradores. Se identificaron a las funciones de control interno y auditoría interna como las principales líneas de prevención y aseguramiento frente a estas actividades criminales.

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CEO Network Centrality and the Likelihood of Financial Reporting Fraud

Cited by 14 publications

References 79 publications

Are female CFOs more ethical to the occurrences of financial reporting fraud? Theoretical and empirical evidence from cross-listed firms in the US

Are female CFOs more ethical to the occurrences of financial reporting fraud? Theoretical and empirical evidence from cross-listed firms in the US

Do powerful CEOs matter for earnings quality? Evidence from Bangladesh

Ciberdelito y su asociación en el cometimiento de fraudes financieros en la pandemia de la COVID-19

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