Accruals, real earnings management, and CEO demographic attributes in emerging markets: Does concentration of family ownership count?

Abstract

The present study utilizes agency theory and the upper echelons theory (UET) to investigate whether there is a moderating effect of family ownership concentration (FOWC) on the association between CEO demographic attributes and two forms of earnings management (EM), specifically accruals earnings management (AEM) and real earnings management (REM).Additionally, this study investigates whether CEO demographic attributes affect EM (AEM and REM) in Jordanian companies.The study sample includes 137 companies listed on the Amman Stock Exchange (ASE) from 2017 to 2021, with the banking and insurance sectors excluded, resulting in 685 company-year observations.To accomplish the study's goals, feasible generalized least squares estimation (FGLS) regressions were applied.The findings indicate that CEO non-duality and age decrease REM and improve the quality of financial reporting (QFR).However, they indicate that CEO age increases AEM, and family ownership concentration enhances the power of older CEOs to engage in AEM and affects QFR.The study finds that a CEO with high education does not affect EM but that the presence of family ownership increases a CEO's capacity with high education to reduce EM (AEM and REM) and generate trustworthy financial reports.However, we don't find any relationship between CEO gender and EM (AEM &REM), but family ownership increases male CEOs' power to engage in AEM.In addition, the outcome shows that family ownership concentration interacts with CEO non-duality and leads to restricting REM and engagement in AEM practices.This study is among the earliest attempts to examine PUBLIC INTEREST STATEMENTThis paper aims to investigate the relationship between CEO demographic attributes and earnings management (AEM&REM), as well as how family ownership concentration affects this relationship.The study is motivated by the lack of research in Jordan and inconsistent empirical results regarding the impact of CEO demographic attributes on earnings management.The paper uses secondary data collected from firms' annual reports in Jordan.The research findings suggest that CEO non-duality and age decrease REM and improve the quality of financial reporting (QFR).However, they also indicate that CEO age increases AEM.Moreover, the study reveals that family ownership concentration moderates the relationship between CEO demographic attributes and earnings management (AEM&REM), affecting the quality of financial reporting.The results of this study are significant in providing meaningful insights for various stakeholders, such as management, investors, and owners, about the QFR and EM practices in emerging markets, especially those with family ownership concentration.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 19 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.