IDEAS home Printed from https://ideas.repec.org/a/eee/pacfin/v80y2023ics0927538x23001713.html
   My bibliography  Save this article

CFO gender and financial statement comparability

Author

Listed:
  • Wang, Fangjun
  • Zhang, Zhichao
  • Ho, L.C. Jennifer
  • Usman, Muhammad

Abstract

This study examines the effect of chief financial officers (CFOs) gender on firms' financial statement comparability. Using a sample of Chinese listed firms, we find that firms with female CFOs exhibit higher comparability relative to firms with male CFOs. We further find that the positive relation between having a female CFO and comparability disappears in the industries that are dominated with male CFOs. In additional analyses, we fail to find any significant effects of having female chief executive officers (CEOs) or other female executives on comparability, highlighting the importance of CFOs in the domain of financial reporting decisions. Finally, we show that only in non-male CFO dominated industries, greater comparability is associated with an improvement in analysts' forecast accuracy and dispersion. Overall, our findings are consistent with the view that, due to their innate personality and behavioral differences, female CFOs are likely to exhibit stronger incentives to comply with accounting rules and standards, which in turn improves comparability. We also highlight the uniqueness of comparability by showing that it does not always co-move with reporting quality since it is an inter-firm attribute rather than a firm's own reporting characteristic.

Suggested Citation

  • Wang, Fangjun & Zhang, Zhichao & Ho, L.C. Jennifer & Usman, Muhammad, 2023. "CFO gender and financial statement comparability," Pacific-Basin Finance Journal, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:pacfin:v:80:y:2023:i:c:s0927538x23001713
    DOI: 10.1016/j.pacfin.2023.102100
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0927538X23001713
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.pacfin.2023.102100?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bin Srinidhi & Ferdinand A. Gul & Judy Tsui, 2011. "Female Directors and Earnings Quality," Contemporary Accounting Research, John Wiley & Sons, vol. 28(5), pages 1610-1644, December.
    2. Tomas Hjelström & Juha-Pekka Kallunki & Henrik Nilsson & Milda Tylaite, 2020. "Executives’ Personal Tax Behavior and Corporate Tax Avoidance Consistency," European Accounting Review, Taylor & Francis Journals, vol. 29(3), pages 493-520, May.
    3. Gus De Franco & S.P. Kothari & Rodrigo S. Verdi, 2011. "The Benefits of Financial Statement Comparability," Journal of Accounting Research, Wiley Blackwell, vol. 49(4), pages 895-931, September.
    4. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    5. S.P. Kothari & Karthik Ramanna & Douglas J. Skinner, 2009. "Implications for GAAP from an Analysis of Positive Research in Accounting," Harvard Business School Working Papers 09-137, Harvard Business School, revised Sep 2010.
    6. Swamy, Anand & Knack, Stephen & Lee, Young & Azfar, Omar, 2001. "Gender and corruption," Journal of Development Economics, Elsevier, vol. 64(1), pages 25-55, February.
    7. Joseph H. Zhang, 2018. "Accounting Comparability, Audit Effort, and Audit Outcomes," Contemporary Accounting Research, John Wiley & Sons, vol. 35(1), pages 245-276, March.
    8. Bill Francis & Iftekhar Hasan & Jong Chool Park & Qiang Wu, 2015. "Gender Differences in Financial Reporting Decision Making: Evidence from Accounting Conservatism," Contemporary Accounting Research, John Wiley & Sons, vol. 32(3), pages 1285-1318, September.
    9. Prince, Melvin, 1993. "Women, men and money styles," Journal of Economic Psychology, Elsevier, vol. 14(1), pages 175-182, March.
    10. Caglio, Ariela & Dossi, Andrea & Van der Stede, Wim A., 2018. "CFO role and CFO compensation: an empirical analysis of their implications," LSE Research Online Documents on Economics 88296, London School of Economics and Political Science, LSE Library.
    11. Medhat Endrawes & Zhuoan Feng & Meiting Lu & Yaowen Shan, 2020. "Audit committee characteristics and financial statement comparability," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 2361-2395, September.
    12. Francis, Bill & Hasan, Iftekhar & Wu, Qiang & Yan, Meng, 2014. "Are female CFOs less tax aggressive? Evidence from tax aggressiveness," Bank of Finland Research Discussion Papers 16/2014, Bank of Finland.
    13. Eckel, Catherine C. & Grossman, Philip J., 2008. "Men, Women and Risk Aversion: Experimental Evidence," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 113, pages 1061-1073, Elsevier.
    14. David A. Matsa & Amalia R. Miller, 2013. "A Female Style in Corporate Leadership? Evidence from Quotas," American Economic Journal: Applied Economics, American Economic Association, vol. 5(3), pages 136-169, July.
    15. Nabil Ibrahim & John Angelidis, 2009. "The Relative Importance of Ethics as a Selection Criterion for Entry-Level Public Accountants: Does Gender Make a Difference?," Journal of Business Ethics, Springer, vol. 85(1), pages 49-58, February.
    16. Simon Ho & Annie Li & Kinsun Tam & Feida Zhang, 2015. "CEO Gender, Ethical Leadership, and Accounting Conservatism," Journal of Business Ethics, Springer, vol. 127(2), pages 351-370, March.
    17. Cascino, Stefano & Gassen, Joachim, 2015. "What drives the comparability effect of mandatory IFRS adoption?," LSE Research Online Documents on Economics 57682, London School of Economics and Political Science, LSE Library.
    18. Myung-Gun Lee & Minjung Kang & Ho-Young Lee & Jong Chool Park, 2016. "Related-party transactions and financial statement comparability: evidence from South Korea," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(2), pages 224-252, June.
    19. Yong-Shik Kim & Sun A Kang & Sang-Hun Park, 2021. "The effect of management style on financial statement comparability: evidence from Korean business groups," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 28(4), pages 454-471, July.
    20. Chava, Sudheer & Purnanandam, Amiyatosh, 2010. "CEOs versus CFOs: Incentives and corporate policies," Journal of Financial Economics, Elsevier, vol. 97(2), pages 263-278, August.
    21. Roman Lanis & Grant Richardson & Grantley Taylor, 2017. "Board of Director Gender and Corporate Tax Aggressiveness: An Empirical Analysis," Journal of Business Ethics, Springer, vol. 144(3), pages 577-596, September.
    22. Ball, Ray & Kothari, S. P. & Robin, Ashok, 2000. "The effect of international institutional factors on properties of accounting earnings," Journal of Accounting and Economics, Elsevier, vol. 29(1), pages 1-51, February.
    23. Yu Liu & Zuobao Wei & Feixue Xie, 2016. "CFO gender and earnings management: evidence from China," Review of Quantitative Finance and Accounting, Springer, vol. 46(4), pages 881-905, May.
    24. Liu, Ye & Liu, Jingzhe & Ai, Wei & Wang, Zengxiang & An, Yunbi, 2022. "Agency conflicts in co-regulation: Evidence from IPO application screening in China," International Review of Financial Analysis, Elsevier, vol. 82(C).
    25. Mitchell A. Petersen, 2009. "Estimating Standard Errors in Finance Panel Data Sets: Comparing Approaches," The Review of Financial Studies, Society for Financial Studies, vol. 22(1), pages 435-480, January.
    26. DeFond, Mark & Hu, Xuesong & Hung, Mingyi & Li, Siqi, 2011. "The impact of mandatory IFRS adoption on foreign mutual fund ownership: The role of comparability," Journal of Accounting and Economics, Elsevier, vol. 51(3), pages 240-258, April.
    27. Cristian L. Dezsö & David Gaddis Ross, 2012. "Does female representation in top management improve firm performance? A panel data investigation," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1072-1089, September.
    28. Richard A. Bernardi & Donald F. Arnold, 1997. "An Examination of Moral Development within Public Accounting by Gender, Staff Level, and Firm," Contemporary Accounting Research, John Wiley & Sons, vol. 14(4), pages 653-668, December.
    29. Basu, Sudipta, 1997. "The conservatism principle and the asymmetric timeliness of earnings," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 3-37, December.
    30. Eckel, Catherine C. & Grossman, Philip J., 2008. "Differences in the Economic Decisions of Men and Women: Experimental Evidence," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 57, pages 509-519, Elsevier.
    31. repec:zbw:bofrdp:2014_016 is not listed on IDEAS
    32. Sunden, Annika E & Surette, Brian J, 1998. "Gender Differences in the Allocation of Assets in Retirement Savings Plans," American Economic Review, American Economic Association, vol. 88(2), pages 207-211, May.
    33. Renée B. Adams & Patricia Funk, 2012. "Beyond the Glass Ceiling: Does Gender Matter?," Management Science, INFORMS, vol. 58(2), pages 219-235, February.
    34. Xue Wang & Feng Cao & Kangtao Ye, 2018. "Mandatory Corporate Social Responsibility (CSR) Reporting and Financial Reporting Quality: Evidence from a Quasi-Natural Experiment," Journal of Business Ethics, Springer, vol. 152(1), pages 253-274, September.
    35. Steven Kaplan & Kurt Pany & Janet Samuels & Jian Zhang, 2009. "An Examination of the Association Between Gender and Reporting Intentions for Fraudulent Financial Reporting," Journal of Business Ethics, Springer, vol. 87(1), pages 15-30, June.
    36. Kim, Jeong-Bon & Li, Leye & Lu, Louise Yi & Yu, Yangxin, 2016. "Financial statement comparability and expected crash risk," Journal of Accounting and Economics, Elsevier, vol. 61(2), pages 294-312.
    37. Jin-hui Luo & Zeyue Huang & Xue Li & Xiaojing Lin, 2018. "Are Women CEOs Valuable in Terms of Bank Loan Costs? Evidence from China," Journal of Business Ethics, Springer, vol. 153(2), pages 337-355, December.
    38. Ray Ball & Lakshmanan Shivakumar, 2006. "The Role of Accruals in Asymmetrically Timely Gain and Loss Recognition," Journal of Accounting Research, Wiley Blackwell, vol. 44(2), pages 207-242, May.
    39. Raffi Indjejikian & Michal Matějka, 2009. "CFO Fiduciary Responsibilities and Annual Bonus Incentives," Journal of Accounting Research, Wiley Blackwell, vol. 47(4), pages 1061-1093, September.
    40. Yuan, Rongli & Wen, Wen, 2018. "Managerial foreign experience and corporate innovation," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 752-770.
    41. K. Hung Chan & Donghui Wu, 2011. "Aggregate Quasi Rents and Auditor Independence: Evidence from Audit Firm Mergers in China," Contemporary Accounting Research, John Wiley & Sons, vol. 28(1), pages 175-213, March.
    42. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1067-1101.
    43. (Xuefeng) Jiang, John & Petroni, Kathy R. & Yanyan Wang, Isabel, 2010. "CFOs and CEOs: Who have the most influence on earnings management?," Journal of Financial Economics, Elsevier, vol. 96(3), pages 513-526, June.
    44. Fangjun Wang & Zhichao Zhang & Luying Xu, 2020. "Corporate social responsibility and financial statement comparability: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1375-1394, May.
    45. Opare, Solomon & Houqe, Muhammad Nurul & van Zijl, Tony, 2020. "IFRS adoption and seasoned equity offering underperformance," Pacific-Basin Finance Journal, Elsevier, vol. 61(C).
    46. Julie Agnew & Pierluigi Balduzzi & Annika Sundén, 2003. "Portfolio Choice and Trading in a Large 401(k) Plan," American Economic Review, American Economic Association, vol. 93(1), pages 193-215, March.
    47. Holger Daske & Luzi Hail & Christian Leuz & Rodrigo Verdi, 2008. "Mandatory IFRS Reporting around the World: Early Evidence on the Economic Consequences," Journal of Accounting Research, Wiley Blackwell, vol. 46(5), pages 1085-1142, December.
    48. David Naranjo-Gil & Victor Maas & Frank Hartmann, 2009. "How CFOs Determine Management Accounting Innovation: An Examination of Direct and Indirect Effects," European Accounting Review, Taylor & Francis Journals, vol. 18(4), pages 667-695.
    49. Steve Lin & William N. Riccardi & Changjiang Wang & Patrick E. Hopkins & Gary Kabureck, 2019. "Relative Effects of IFRS Adoption and IFRS Convergence on Financial Statement Comparability," Contemporary Accounting Research, John Wiley & Sons, vol. 36(2), pages 588-628, June.
    50. Charles Ham & Mark Lang & Nicholas Seybert & Sean Wang, 2017. "CFO Narcissism and Financial Reporting Quality," Journal of Accounting Research, Wiley Blackwell, vol. 55(5), pages 1089-1135, December.
    51. Vivian W. Fang & Mark Maffett & Bohui Zhang, 2015. "Foreign Institutional Ownership and the Global Convergence of Financial Reporting Practices," Journal of Accounting Research, Wiley Blackwell, vol. 53(3), pages 593-631, June.
    52. Denton Collins & Gary Fleischman & Stacey Kaden & Juan Manuel Sanchez, 2018. "How Powerful CFOs Camouflage and Exploit Equity-Based Incentive Compensation," Journal of Business Ethics, Springer, vol. 153(2), pages 591-613, December.
    53. Karen M. Y. Lai & Bin Srinidhi & Ferdinand A. Gul & Judy S. L. Tsui, 2017. "Board Gender Diversity, Auditor Fees, and Auditor Choice," Contemporary Accounting Research, John Wiley & Sons, vol. 34(3), pages 1681-1714, September.
    54. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    55. Jong‐Hag Choi & Sunhwa Choi & Linda A. Myers & David Ziebart, 2019. "Financial Statement Comparability and the Informativeness of Stock Prices About Future Earnings," Contemporary Accounting Research, John Wiley & Sons, vol. 36(1), pages 389-417, March.
    56. Huang, Jiekun & Kisgen, Darren J., 2013. "Gender and corporate finance: Are male executives overconfident relative to female executives?," Journal of Financial Economics, Elsevier, vol. 108(3), pages 822-839.
    57. Luo, Jin-hui & Peng, Chenchen & Zhang, Xin, 2020. "The impact of CFO gender on corporate fraud: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 63(C).
    58. Emmanuel T. De George & Xi Li & Lakshmanan Shivakumar, 2016. "A review of the IFRS adoption literature," Review of Accounting Studies, Springer, vol. 21(3), pages 898-1004, September.
    59. Alaa Mansour Zalata & Collins Ntim & Ahmed Aboud & Ernest Gyapong, 2019. "Female CEOs and Core Earnings Quality: New Evidence on the Ethics Versus Risk-Aversion Puzzle," Journal of Business Ethics, Springer, vol. 160(2), pages 515-534, December.
    60. Weili GE & Dawn Matsumoto & Jenny Li Zhang, 2011. "Do CFOs Have Style? An Empirical Investigation of the Effect of Individual CFOs on Accounting Practices," Contemporary Accounting Research, John Wiley & Sons, vol. 28(4), pages 1141-1179, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhichao Zhang & Fangjun Wang, 2023. "Managerial short‐termism and financial statement comparability," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(5), pages 5027-5067, December.
    2. Fangjun Wang & Zhichao Zhang & Luying Xu, 2020. "Corporate social responsibility and financial statement comparability: Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1375-1394, May.
    3. Li, Yiwei & Zeng, Yeqin, 2019. "The impact of top executive gender on asset prices: Evidence from stock price crash risk," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 528-550.
    4. Doan, Trang & Iskandar-Datta, Mai, 2020. "Are female top executives more risk-averse or more ethical? Evidence from corporate cash holdings policy," Journal of Empirical Finance, Elsevier, vol. 55(C), pages 161-176.
    5. Alaa Mansour Zalata & Collins Ntim & Ahmed Aboud & Ernest Gyapong, 2019. "Female CEOs and Core Earnings Quality: New Evidence on the Ethics Versus Risk-Aversion Puzzle," Journal of Business Ethics, Springer, vol. 160(2), pages 515-534, December.
    6. Luo, Jin-hui & Peng, Chenchen & Zhang, Xin, 2020. "The impact of CFO gender on corporate fraud: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 63(C).
    7. Belete J. Bobe & Ralph Kober, 2020. "Does gender matter? The association between gender and the use of management control systems and performance measures," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 2063-2098, September.
    8. Liu, Yin & Neely, Pamela & Karim, Khondkar, 2022. "The impact of CFO gender on corporate overinvestment," Advances in accounting, Elsevier, vol. 57(C).
    9. Zalata, Alaa Mansour & Abdelfattah, Tarek, 2021. "Non-executive female directors and earnings management using classification shifting," Journal of Business Research, Elsevier, vol. 134(C), pages 301-315.
    10. Jin-hui Luo & Zeyue Huang & Xue Li & Xiaojing Lin, 2018. "Are Women CEOs Valuable in Terms of Bank Loan Costs? Evidence from China," Journal of Business Ethics, Springer, vol. 153(2), pages 337-355, December.
    11. Simon Ho & Annie Li & Kinsun Tam & Feida Zhang, 2015. "CEO Gender, Ethical Leadership, and Accounting Conservatism," Journal of Business Ethics, Springer, vol. 127(2), pages 351-370, March.
    12. Bill Francis & Iftekhar Hasan & Jong Chool Park & Qiang Wu, 2015. "Gender Differences in Financial Reporting Decision Making: Evidence from Accounting Conservatism," Contemporary Accounting Research, John Wiley & Sons, vol. 32(3), pages 1285-1318, September.
    13. Ying Zhang & Yuting Guo & Aiman Nurdazym, 2023. "How do female CEOs affect corporate environmental policies?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 459-472, January.
    14. Ding Ning & Irfan-Ullah & Muhammad Ansar Majeed & Aurang Zeb, 2022. "Board diversity and financial statement comparability: evidence from China," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(4), pages 743-801, December.
    15. Dina El Mahdy & Fatima Alali, 2023. "Female CFOs and managerial opportunism," Review of Quantitative Finance and Accounting, Springer, vol. 60(3), pages 1161-1207, April.
    16. repec:zbw:bofrdp:2014_001 is not listed on IDEAS
    17. De George, Emmanuel T. & Li, Xi & Shivakumar, Lakshmanan, 2016. "A review of the IFRS adoption literature," LSE Research Online Documents on Economics 67599, London School of Economics and Political Science, LSE Library.
    18. Jarkko Peltomäki & Jukka Sihvonen & Steve Swidler & Sami Vähämaa, 2021. "Age, gender, and risk‐taking: Evidence from the S&P 1500 executives and market‐based measures of firm risk," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 48(9-10), pages 1988-2014, October.
    19. Schopohl, Lisa & Urquhart, Andrew & Zhang, Hanxiong, 2021. "Female CFOs, leverage and the moderating role of board diversity and CEO power," Journal of Corporate Finance, Elsevier, vol. 71(C).
    20. Emmanuel T. De George & Xi Li & Lakshmanan Shivakumar, 2016. "A review of the IFRS adoption literature," Review of Accounting Studies, Springer, vol. 21(3), pages 898-1004, September.
    21. Huang, Yong & Yan, Chao, 2020. "Global accounting standards, financial statement comparability, and the cost of capital," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 301-318.

    More about this item

    Keywords

    CFO gender; Risk-aversion; Ethical leadership; Financial statement comparability; Financial reporting quality;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:pacfin:v:80:y:2023:i:c:s0927538x23001713. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/pacfin .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.