Purpose

The study examines whether corporate governance moderates the relationship between CEO compensation and earnings management.

Design/methodology/approach

The study uses 1,800 firm-year observations from 2005 to 2010 and employ multiple regression analyses and other sensitivity tests.

Findings

The study finds a positive relationship between CEO compensation and earnings management. The study’s results also suggest that CEO bonus compensation increases in relation to earnings management and therefore the study infers that managers may become involved in earnings management to increase their compensation. However, the study finds that the relationship is moderated by a strong corporate governance system which reduces the impact of earnings management on CEO compensation.

Research limitations/implications

The study is conducted in a specific context, and therefore it may be subject to a set of limitations. The study emphasises exclusively on whether executives manage earnings to increase their compensation. The study does not consider the issue of several other and potentially contradictory motivations here.

Practical implications

The study’s findings highlight potential implications and offer useful propositions for stakeholders, particularly accounting and corporate governance regulators, to consider. The findings offer a basis for the accounting professions to further discuss and improve accounting standards to provide adequate regulations and monitoring to decrease managerial opportunistic behaviours in earnings manipulations. The findings also emphasise the need for appropriately designed CEO compensation packages in such a manner that improves the manager–shareholder alignment and reduces the information asymmetry problem. The results signify that corporate governance plays a vital role in mitigating the relationship between CEO compensation and earnings management.

Originality/value

This study adds to the existing literature by documenting empirical support on the link between earnings management and CEO compensation against a backdrop of high demand for strong corporate governance practices.

中文翻译：

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公司治理对盈余管理与首席执行官薪酬之间关系的影响

目的

该研究考察了公司治理是否缓和了首席执行官薪酬与盈余管理之间的关系。

设计/方法/方法

该研究使用了从2005年到2010年的1,800个公司年度观察数据，并进行了多元回归分析和其他敏感性检验。

发现

该研究发现首席执行官薪酬与盈余管理之间存在正相关关系。该研究的结果还表明，CEO奖金的薪酬与盈余管理有关，因此，该研究推断出经理人可能会参与盈余管理以增加其薪酬。但是，研究发现，这种关系通过强大的公司治理体系得到缓解，从而减少了盈余管理对首席执行官薪酬的影响。

研究局限/意义

该研究是在特定环境下进行的，因此可能会受到一系列限制。该研究只强调高管人员是否管理收入以增加薪酬。该研究在这里未考虑其他几个可能潜在矛盾的动机的问题。

实际影响

该研究的结果突出了潜在的影响，并为利益相关者（尤其是会计和公司治理监管机构）提供了有益的建议。研究结果为会计界进一步讨论和改善会计准则提供了基础，以提供适当的法规和监控，以减少盈余操纵中的管理机会主义行为。调查结果还强调，需要以适当的方式设计首席执行官薪酬方案，以改善经理人与股东之间的一致性，并减少信息不对称问题。结果表明，公司治理在减轻首席执行官薪酬与盈余管理之间的关系方面起着至关重要的作用。

创意/价值

这项研究通过记录对盈余管理与CEO薪酬之间联系的经验支持，在对强大的公司治理实践有很高需求的背景下，为现有文献提供了补充。