Association between having a CA(SA) as CEO and accruals quality

Purpose - The purpose of this paper is to examine whether Chartered Accountants South Africa (CAs(SA)) as Chief Executive Officers (CEOs) have an association with accruals quality. Design/methodology/approach - The theoretical base of this paper is the link between accounting expertise and accruals...

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Bibliographic Details
Published in:	Meditari accountancy research 2015-10, Vol.23 (3), p.276
Main Authors:	Mey, Elizabeth, de Klerk, Marna
Format:	Article
Language:	eng
Subjects:	Accounting Accruals Appointments & personnel changes Audit committees Audits Earnings Earnings management Financial statements International Financial Reporting Standards Qualifications Stockholders
Online Access:	Get full text
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Summary:	Purpose - The purpose of this paper is to examine whether Chartered Accountants South Africa (CAs(SA)) as Chief Executive Officers (CEOs) have an association with accruals quality. Design/methodology/approach - The theoretical base of this paper is the link between accounting expertise and accruals quality. The sample consists of 812 observations of Johannesburg Stock Exchange (JSE)-listed firms between 2010 and 2013. The association is tested by regressing the CA(SA) as CEO interest variable and control variables on accruals quality, using three metrics of abnormal accruals. Findings - The overall results suggest that less accruals management and estimation error is present when the CEO is a CA(SA). Originality/value - This is the first study to test the association between having a CEO with a professional accounting qualification, such as CA(SA), and accruals quality. The findings will be of interest to shareholders and top executives when evaluating the appointment of a CEO.
ISSN:	2049-372X 2049-3738