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Female CFOs and accounting fraud: Evidence from China

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  • Liao, Jing
  • Smith, David
  • Liu, Xutang

Abstract

We investigate the influence of female chief financial officers (CFOs) on accounting fraud. Using a sample of Chinese listed firms for the period from 2003 to 2015, we find firms with female CFOs are significantly less likely to engage in accounting fraud. Further we find the negative relationship between female CFOs and accounting fraud is less significant in state-owned enterprises (SOEs), where political concerns are more pronounced. Additional tests show that the negative relationship is significant in firms with gender-mixed boards rather than male-only boards. In addition, the relationship is more pronounced when the firm has a less powerful CEO and when the CFO simultaneously holds a directorship in the same firm. Our analysis addresses both the selection and treatment concerns.

Suggested Citation

  • Liao, Jing & Smith, David & Liu, Xutang, 2019. "Female CFOs and accounting fraud: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 53(C), pages 449-463.
    • Handle: RePEc:eee:pacfin:v:53:y:2019:i:c:p:449-463
    DOI: 10.1016/j.pacfin.2019.01.003
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    Cited by:

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    8. Li, Xiping & Goodell, John W. & Liao, Jing & Yao, Shouyu & Liu, Xutang, 2022. "Does executive gender diversity supply accounting conservatism in traditional societies? Evidence from CEO-CFO combinations in China," Finance Research Letters, Elsevier, vol. 48(C).
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    15. Wang, Ziwei & Yao, Shouyu & Sensoy, Ahmet & Goodell, John W. & Cheng, Feiyang, 2022. "Learning from failures: Director interlocks and corporate misconduct," International Review of Financial Analysis, Elsevier, vol. 84(C).
    16. Zijian Liu & Lian Cai & Yabin Zhang, 2022. "Gender Diversity and Environmental Performance: New Evidence from China," Sustainability, MDPI, vol. 14(21), pages 1-15, October.
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    More about this item

    Keywords

    Female CFO; State control; Corporate governance; Accounting fraud;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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