Relational Dynamics in Earnings Management: Interplay of Celebrity CEOs, CEO-CFO Similarity, and Analyst Coverage

초록

This study explores the relational dynamics between the CEO and the CFO that shape the CEO's engagement in earnings management. Specifically, we investigate how CEO-CFO demographic similarity and analyst coverage interact to influence the CFO's willingness to comply with the celebrity CEO's earnings management preferences. Our findings show that the use of discretionary accruals is more pronounced when CFOs share greater demographic similarity with celebrity CEOs; however, this effect diminishes in firms with high levels of analyst coverage. By highlighting CFOs' compliance as a critical boundary condition that enables celebrity CEOs' influence over a firm's financial reporting, this study provides a more nuanced explanation of how executive preferences are enacted within organizations, contributing to upper echelons theory and earnings management research.JEL CLASSIFICATION: M12; G34

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