The literature examining the relation between CEOs’ total compensation and earnings management is inconclusive, likely due to unobserved determinants of executive compensation. Our study provides new conclusive evidence on this relation by exploring abnormal compensation, the proportion of pay...

In this study, we find that the average cash flow risk (CFR) of United States firms shows a significantly increasing trend over the past four decades or so. This does not portend well considering the significance of cash flows in maintaining a firm’s financial health and going concern status....