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Gender differences in financial reporting decision-making: Evidence from accounting conservatism

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  • Francis, Bill
  • Hasan, Iftekhar
  • Wu, Qiang
  • Park, Jong Chool

Abstract

This paper investigates the effect of CFO gender on corporate financial reporting decision-making. Focusing on firms that experience changes of CFO from male to female, the paper compares the firms' degree of accounting conservatism between pre- and post-transition periods. We find that female CFOs are more conservative in their financial reporting. In addition, we find that the relation between CFO gender and conservatism varies with the levels of various firm risks such as litigation risk, default risk, systematic risk, and CFO specific risk such as job security risk. We further find that risk-aversion of female CFOs is associated with less equity-based compensation, lower firm risk, higher tangibility level, and lower dividend payout level. Overall, the study provides strong support for the notion that female CFOs are more risk averse than male CFOs, which leads female CFOs to adopt more conservative financial reporting policies.

Suggested Citation

  • Francis, Bill & Hasan, Iftekhar & Wu, Qiang & Park, Jong Chool, 2014. "Gender differences in financial reporting decision-making: Evidence from accounting conservatism," Bank of Finland Research Discussion Papers 1/2014, Bank of Finland.
    • Handle: RePEc:zbw:bofrdp:rdp2014_001
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    More about this item

    Keywords

    Accounting Conservatism; Gender; CFO; Risk-Aversion;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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