Female Executives and Earnings Management

Purpose – The purpose of this paper is to examine the association between earnings management and the gender of the firm's executives.Design/methodology/approach – Panel regressions of discretionary accruals on a set of female executive dummies and firm-specific controls.Findings – The results provide considerable evidence to suggest that firms with female CFOs are associated with income-decreasing discretionary accruals, thereby implying that female CFOs are following more conservative earnings management strategies.Research limitations/implications – In general, the findings indicate that gender-based differences in conservatism, risk-aversion, and managerial opportunism may have important implications for financial reporting and corporate governance.Originality/value – This paper extends prior research by addressing the potential effects of female executives on earnings management. The findings reported in this paper provide novel insights to the empirical financial accounting literature