PROTOCOL: Does executive compensation predict publicly traded firms’ financial performance or inaccurate financial reporting?

Forthcoming: Review of Financial Studies Financing and New Product Decisions of Private and Publicly Traded Firms

Phillips acknowledges financial support of the NSF through grant #0965328. Sertsios acknowledges the financial support of Fondecyt Proyecto Regular # 1160037. We thank Itay Goldstein (Editor) and two anonymous referees for very helpful comments. We are also indebted to Nicholas Crain, Erik Gilje, Kathleen Kahle, Yelena Larkin, P.T. Léger, Chen Lin, Evgeny Lyandres, Maria Teresa Marchica, Paul P...

Financial Misrepresentation, Executive Compensation, and Firm Performance: an Empirical Study

Financial misrepresentation has serious, detrimental economic and social impacts. We present hypotheses regarding the factors that incline a firm to misrepresent its finances. Using a matched sample design, we find that three factors increase a firm’s probability of misrepresenting its financial position: performance below its industry’s average performance, performance significantly above its ...

Top Executive Background and Financial Reporting Choice

We study the role of executive functional background in explaining management discretion in financial reporting. Taking goodwill impairment as our reporting setting, we focus on top executives (CEOs and CFOs) whose employment history includes experience in investment banking, private equity, venture capital or management consulting, as we expect these executives to have unique human capital and...

Stock Market Pressure on Inventory Investment and Sales Reporting for Publicly Traded Firms

Using contingency approach to improve firms’ financial performance forecasts

One of the challenging issues for investors and professionals is appropriate models to evaluate financial situation of the firms. In this regard, many models have been extracted by researchers using different financial ratios to resolve these issues. However, choosing a model based on the conditions and users’ needs is complex. The main objective of this study is to identify the effect of conti...