Earnings Management: analysis of powerful CEO in presence of social ties
Autor(a) principal: | |
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Data de Publicação: | 2021 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | por eng |
Título da fonte: | Revista Catarinense da Ciência Contábil (Online) |
Texto Completo: | https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230 |
Resumo: | This study aimed to analyze the influence of powerful CEOs on earnings management (EM) considering the presence of social connections between the CEO and members of the board of directors (CA). The sample consisted of 183 Brazilian companies listed in [B]³ in the period 2011 to 2017, totaling 881 observations. EM was measured by the Jones (1991) and Modified Jones (1995) models and considered the dependent variable, under which the effect of (i) a CEO power metric developed by principal component analysis was analyzed from a multidimensional perspective of power (structural power, ownership power, power of specialization and power of prestige), (ii) an index that measures the level of social connections between the CEO and the Board members based on indicators already reviewed by the literature (educational, professional and family relationships background), and (iii) the interaction between these variables. The results of 6 linear regression estimates (MQO) with cross-section pools and robust errors indicate that powerful CEOs are related to higher levels of discretionary accruals, while social connections mitigate EM. When the interaction between these variables is included, both CEO power and social connections lose their significant effect on EM, indicating that in the presence of social connections, powerful CEOs may fail to engage in EM practices. This result contributes to the discussion about the interference of social factors on economic decisions, drawing attention to the impact of social factors on the quality of profits and the CG of companies. |
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Earnings Management: analysis of powerful CEO in presence of social tiesGerenciamento de resultados: análise do poder do CEO na presença de conexões sociais Earnings ManagementPowerful CEOsSocial TiesGovernanceGerenciamento de ResultadosPowerful CEOsConexões SociaisGovernançaThis study aimed to analyze the influence of powerful CEOs on earnings management (EM) considering the presence of social connections between the CEO and members of the board of directors (CA). The sample consisted of 183 Brazilian companies listed in [B]³ in the period 2011 to 2017, totaling 881 observations. EM was measured by the Jones (1991) and Modified Jones (1995) models and considered the dependent variable, under which the effect of (i) a CEO power metric developed by principal component analysis was analyzed from a multidimensional perspective of power (structural power, ownership power, power of specialization and power of prestige), (ii) an index that measures the level of social connections between the CEO and the Board members based on indicators already reviewed by the literature (educational, professional and family relationships background), and (iii) the interaction between these variables. The results of 6 linear regression estimates (MQO) with cross-section pools and robust errors indicate that powerful CEOs are related to higher levels of discretionary accruals, while social connections mitigate EM. When the interaction between these variables is included, both CEO power and social connections lose their significant effect on EM, indicating that in the presence of social connections, powerful CEOs may fail to engage in EM practices. This result contributes to the discussion about the interference of social factors on economic decisions, drawing attention to the impact of social factors on the quality of profits and the CG of companies.Este estudo teve como objetivo analisar a influência de CEOs poderosos no gerenciamento de resultados (GR) considerando a presença de conexões sociais entre o CEO e os membros do Conselho de Administração (CA). A amostra foi constituída de 183 empresas brasileiras listadas na [B]3 S.A. no período de 2011 a 2017, totalizando 881 observações. O GR foi mensurado pelo modelo de Jones (1991) e Jones Modificado (1995) e considerada a variável dependente, sob qual foi analisado o efeito de: (i) uma métrica de poder do CEO desenvolvida por análise de componentes principais a partir de uma ótica multidimensional de poder (poder estrutural, poder de propriedade, poder de especialização e poder de prestígio), (ii) um índice que mensura o nível das conexões sociais entre o CEO e os membros do CA a partir de indicadores já revisados pela literatura (background educacional, profissional e relações familiares), e (iii) a interação entre estas variáveis. Os resultados das 6 estimações de regressões lineares (MQO) com pools de cross-section e erros-robustos indicam que CEOs poderosos estão relacionados a maiores níveis de accruals discricionários, enquanto as conexões sociais mitigam o GR. Quando incluída a interação entre essas variáveis, tanto o poder do CEO quanto as conexões sociais perdem o efeito significativo sobre o GR, indicando que na presença das conexões sociais, CEOs poderosos podem deixar de se engajar em práticas de GR. Esse resultado contribui para a discussão sobre a interferência de fatores sociais sobre decisões econômicas chamando atenção para o impacto de fatores socias na qualidade dos lucros e na GC das empresas.Conselho Regional de Contabilidade de Santa Catarina2021-12-29info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionapplication/pdfapplication/pdfapplication/ziptext/xmlhttps://revista.crcsc.org.br/index.php/CRCSC/article/view/323010.16930/2237-766220213230Revista Catarinense da Ciência Contábil; v. 20 (2021): RCCC; e32302237-76621808-378110.16930/10.16930/2237-76622021reponame:Revista Catarinense da Ciência Contábil (Online)instname:Conselho Regional de Contabilidade de Santa Catarina (CRCSC)instacron:CRCSCporenghttps://revista.crcsc.org.br/index.php/CRCSC/article/view/3230/2340https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230/2344https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230/2341https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230/234210.16930/2237-766220213230110.16930/2237-7662202132302Copyright (c) 2021 Revista Catarinense da Ciência Contábilhttps://creativecommons.org/licenses/by/4.0info:eu-repo/semantics/openAccessLocatelli, Letícia GomesRamos, Fernando MacielSprenger, Kélim Bernardes2022-02-03T18:23:19Zoai:ojs.pkp.sfu.ca:article/3230Revistahttp://www.atena.org.br/revista/ojs-2.2.3-06/index.php/crcscPRIhttp://revista.crcsc.org.br/revista/ojs-2.2.3-06/index.php/CRCSC/oai||revista@crcsc.org.br2237-76621808-3781opendoar:2022-02-03T18:23:19Revista Catarinense da Ciência Contábil (Online) - Conselho Regional de Contabilidade de Santa Catarina (CRCSC)false |
dc.title.none.fl_str_mv |
Earnings Management: analysis of powerful CEO in presence of social ties Gerenciamento de resultados: análise do poder do CEO na presença de conexões sociais |
title |
Earnings Management: analysis of powerful CEO in presence of social ties |
spellingShingle |
Earnings Management: analysis of powerful CEO in presence of social ties Locatelli, Letícia Gomes Earnings Management Powerful CEOs Social Ties Governance Gerenciamento de Resultados Powerful CEOs Conexões Sociais Governança |
title_short |
Earnings Management: analysis of powerful CEO in presence of social ties |
title_full |
Earnings Management: analysis of powerful CEO in presence of social ties |
title_fullStr |
Earnings Management: analysis of powerful CEO in presence of social ties |
title_full_unstemmed |
Earnings Management: analysis of powerful CEO in presence of social ties |
title_sort |
Earnings Management: analysis of powerful CEO in presence of social ties |
author |
Locatelli, Letícia Gomes |
author_facet |
Locatelli, Letícia Gomes Ramos, Fernando Maciel Sprenger, Kélim Bernardes |
author_role |
author |
author2 |
Ramos, Fernando Maciel Sprenger, Kélim Bernardes |
author2_role |
author author |
dc.contributor.author.fl_str_mv |
Locatelli, Letícia Gomes Ramos, Fernando Maciel Sprenger, Kélim Bernardes |
dc.subject.por.fl_str_mv |
Earnings Management Powerful CEOs Social Ties Governance Gerenciamento de Resultados Powerful CEOs Conexões Sociais Governança |
topic |
Earnings Management Powerful CEOs Social Ties Governance Gerenciamento de Resultados Powerful CEOs Conexões Sociais Governança |
description |
This study aimed to analyze the influence of powerful CEOs on earnings management (EM) considering the presence of social connections between the CEO and members of the board of directors (CA). The sample consisted of 183 Brazilian companies listed in [B]³ in the period 2011 to 2017, totaling 881 observations. EM was measured by the Jones (1991) and Modified Jones (1995) models and considered the dependent variable, under which the effect of (i) a CEO power metric developed by principal component analysis was analyzed from a multidimensional perspective of power (structural power, ownership power, power of specialization and power of prestige), (ii) an index that measures the level of social connections between the CEO and the Board members based on indicators already reviewed by the literature (educational, professional and family relationships background), and (iii) the interaction between these variables. The results of 6 linear regression estimates (MQO) with cross-section pools and robust errors indicate that powerful CEOs are related to higher levels of discretionary accruals, while social connections mitigate EM. When the interaction between these variables is included, both CEO power and social connections lose their significant effect on EM, indicating that in the presence of social connections, powerful CEOs may fail to engage in EM practices. This result contributes to the discussion about the interference of social factors on economic decisions, drawing attention to the impact of social factors on the quality of profits and the CG of companies. |
publishDate |
2021 |
dc.date.none.fl_str_mv |
2021-12-29 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230 10.16930/2237-766220213230 |
url |
https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230 |
identifier_str_mv |
10.16930/2237-766220213230 |
dc.language.iso.fl_str_mv |
por eng |
language |
por eng |
dc.relation.none.fl_str_mv |
https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230/2340 https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230/2344 https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230/2341 https://revista.crcsc.org.br/index.php/CRCSC/article/view/3230/2342 10.16930/2237-7662202132301 10.16930/2237-7662202132302 |
dc.rights.driver.fl_str_mv |
Copyright (c) 2021 Revista Catarinense da Ciência Contábil https://creativecommons.org/licenses/by/4.0 info:eu-repo/semantics/openAccess |
rights_invalid_str_mv |
Copyright (c) 2021 Revista Catarinense da Ciência Contábil https://creativecommons.org/licenses/by/4.0 |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf application/pdf application/zip text/xml |
dc.publisher.none.fl_str_mv |
Conselho Regional de Contabilidade de Santa Catarina |
publisher.none.fl_str_mv |
Conselho Regional de Contabilidade de Santa Catarina |
dc.source.none.fl_str_mv |
Revista Catarinense da Ciência Contábil; v. 20 (2021): RCCC; e3230 2237-7662 1808-3781 10.16930/10.16930/2237-76622021 reponame:Revista Catarinense da Ciência Contábil (Online) instname:Conselho Regional de Contabilidade de Santa Catarina (CRCSC) instacron:CRCSC |
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Conselho Regional de Contabilidade de Santa Catarina (CRCSC) |
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CRCSC |
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Revista Catarinense da Ciência Contábil (Online) |
collection |
Revista Catarinense da Ciência Contábil (Online) |
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Revista Catarinense da Ciência Contábil (Online) - Conselho Regional de Contabilidade de Santa Catarina (CRCSC) |
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||revista@crcsc.org.br |
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