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Events Details

​Equity Incentives and Financial Misreporting: Evidence from the CEO’s Motive for Pursuing Personal Wealth

Event Date & Time: 13-Sep-2017 1330hrs - 1500hrs
Venue: Executive Seminar Room 5 (S3.1-B1-07)
Contact Information:

​Chairperson: 

Assistant Professor Chris PARK


Abstract

Prior research has documented theoretically and empirically inconclusive evidence on the incentive effect of portfolio delta (i.e. the sensitivity of the manager’s wealth to changes in stock price) on financial misreporting. We provide a new angle to revisit the mixed evidence by examining the Accounting and Auditing Enforcement Releases (AAERs) to identify the misreporting cases caused by a CEO’s motive for pursuing personal wealth (wealth-pursuing motive). We document that the wealth-pursuing motive, which is found to be positively explained by the CEO’s delta, accounts for the highest proportion (34%) among the misreporting motives in the AAER sample. Our findings are consistent with delta’s positive “reward effect” on misreporting discussed in Armstrong et al. (2013). The evidence also supports the incentive plan hypothesis of the positive accounting theory.
 
About the Speaker

Yachang Zeng is Assistant Professor in Nanyang Business School, Nanyang Technological University. Professor Zeng received her PhD in Accounting and Finance from Lancaster University in 2010. She joined Tilburg University as an Assistant Professor in 2009-2015. During 2008-2010, she was a research member of the INTACCT research network, which promotes a scientific research programme related to the adoption of International Financial Reporting Standards (IFRS) in Europe. She has taught Introductory Financial Accounting and Introductory Managerial Accounting for the undergraduate programme and Financial Information in Capital Markets for the master programme at Tilburg University. Her research interests include neuroeconomics, managerial personal characteristics, international accounting, earnings management, CEO compensation, and financial intermediaries. Her research has been published or is forthcoming in Journal of Accounting Research and The Accounting Review. Before starting her academic career, she was a CPA in China. Her hobbies and interests include travelling, cooking, reading, hiking and cycling.
 
 
 
Venue Website: http://maps.ntu.edu.sg/maps#q:executive%20seminar%20rooms
 
For further information and enquiries, please contact Adeline Tang at amytang@ntu.edu.sg.
 
Nanyang Business School, Nanyang Technological University, Block S3, 50 Nanyang Avenue, Singapore 639798 www.ntu.edu.sg
 

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