Top management gender and earnings management

Abstract

Top management (including CEOs and CFOs) are firms’ crucial resources, especially in preparing financial statements that are used by external parties in making decisions. Besides, prior literature also demonstrates that top managers’ gender affects their decisions. Accordingly, this study seeks to analyze the effect of CEO and CFO gender on earnings management in manufacture company. We use the modified Dechow-Dichev Model by Mcnichols (2002) to identify earnings management. The results show that female CEOs and CFO have no significant effects on earnings management practices. Several arguments explain the results, including that female CEOs in developing countries do not make significantly different decisions than their male counterparts. Additionally, CFOs cannot make decisions without CEOs’ approval.

The Likelihood of Financial Reporting Fraud: Does the Gender of CEO, CFO, Board of Commissioners, and Audit Committee Matter?

“…The results of this test are contrary to Setyaningrum et al (2019) who found that female CEOs have a negative and significant effect on fraud in the form of earnings management. However, the results of testing the first hypothesis are in line with Deruvensi & Kristianti (2022) who proved that female CEOs do not affect accounting fraud. Harris et al (2019) assert that female CEOs do not necessarily reduce fraud, because female and male CEOs show very similar cheating behavior.…”

“…Luo et al (2020); Maulidi et al (2022); found that women are more risk-averse and committed to ethical practices than men in leadership positions in companies and female CFOs tend not to engage in risky and unethical financial reporting fraud compared to male CFOs. Conversely, Deruvensi & Kristianti (2022) prove that female CFOs do not affect reducing accounting fraud. Ahmadi et al (2018);and Brahma et al (2021) state that the role of women as commissioners on boards of companies is very important.…”

“…Women are also more trustworthy than men and tend not to engage in fraudulent practices in financial statements and women tend to have a feminine leadership style, therefore they try to minimize violations of financial reporting rules. Meanwhile, Deruvensi & Kristianti (2022);and Harris et al (2019) reported that female CEOs do not necessarily reduce fraud. Female and male CEOs exhibit very similar cheating behavior.…”

Earnings Management: Literature Study of Current Development

“…07, No. 02, December 2022p-ISSN: 2527-4309, e-ISSN: 2580-14815 th Accreditation Rating: January 14, 2019 A review of the theory used in Earnings Management research shows that several theories can be used as alternatives in explaining Earnings Management, such as avoidance theory (Nadhifah & Arif, 2020), fraud triangle theory (Sesaria & Manda, 2021), family ownership theory (Dwiyanti, 2017), role alignment theory (Karina, 2021), resource dependency theory (Deruvensi & Kristianti, 2022), legitimacy theory (Akbar & Purnomo, 2021), stakeholder theory (Senjaya et al, 2021), political theory (Karina, 2021), SEW theory (Senjaya et al, 2021), stakeholder theory (Nadhifah & Arif, 2020), capital structure theory (Kamil & Ariyani, 2017).…”

“…The scope of research is also a concern in this research to find out what was the concern of previous researchers. A total of seven studies discuss Earnings Management in manufacturing companies (Deruvensi & Kristianti, 2022;Hidayat et…”