Chief executive officer characteristics and financial reporting quality: the moderating role of family ownership

• Main Author: Altarawneh, Marwan Hasan
• Format: Thesis
• Language: English; English; English; English
• Published: 2020
• Subjects: HG Finance
• Online Access: https://etd.uum.edu.my/9407/1/depositpermission_s902786.pdf; https://etd.uum.edu.my/9407/2/s902786_01.pdf; https://etd.uum.edu.my/9407/3/s902786_02.pdf; https://etd.uum.edu.my/9407/4/s902786_references.docx; https://etd.uum.edu.my/9407/
• Institution: Universiti Utara Malaysia

The general objective of this study is to examine the relationship between chief executive officer (CEO) characteristics, namely expertise, age, tenure, network, gender, political connection, ethnicity, founder and financial reporting quality based on the agency theory and upper echelons theory. Furthermore, this study examines the moderating role of family ownership on the relationship between CEO characteristics and financial reporting quality. This study utilised a proxy of financial reporting quality which is real earnings management (REM). The sample of the study is 1,957 firm-year observations on the Main Market of Bursa Malaysia over the period of 2012 to 2016. In addition, this study obtained the results from the robust standard error of panel data analysis. This study reveals that CEO expertise and gender increase the quality of financial reporting. However, CEO political connection, ethnicity and founder reduced the quality of financial reporting. With regards to CEO age, tenure, and network, this study found no effect on financial reporting quality. The results also show that family ownership moderates the relationship between CEO expertise, gender and ethnicity with financial reporting quality. However, family ownership fails to moderate the relationship between CEO age, tenure, network, political connection and founder with financial reporting quality. This study also conducts several further analyses, which are individual measures (CFO, PROD and DISEXP), REM_CD, REM_PD, subsamples based on Big 4 and non-Big 4, and finally discretionary accruals. These further analyses provide a deep insight of the effects of CEO characteristics and family ownership on financial reporting quality. The results of this study have implications for investors, regulators, and market participants. Policy makers may use the results regarding financial reporting quality to recognise the important roles played by the characteristics of the CEOs in enhancing the quality of financial reporting. This study provides evidence on the effect of family ownership as a moderating variable between CEO characteristics and financial reporting quality in Malaysian firms.