Date of Completion

5-5-2018

Degree Type

Honors Thesis

Discipline

Accounting (ACCT)

First Advisor

Shan Wang

Abstract

Real Earnings Management involves the deviation from normal business practices to manipulate financial statements. Previous research has shown how higher gender diversity in senior management has led to higher earnings quality, and how firms with female CFOs have less earnings management than male CFOs. This paper will build off previous research and further examine whether CEO gender affects real earnings management and if so, its effects on real earnings management. The main hypothesis of the paper is that the gender of the CEO will affect the extent of real earnings management of a firm; firms with male CEOs will see a higher earnings management, while firms with female CEOs will have lower earnings management. The paper's methodology primarily entails taking a sample of US public firms to measure real earnings management factors of abnormal cash flows, discretionary expenses, and production costs against CEO gender. This involves performing a regression analysis in order to prove the validity of the hypothesis. Results show that the main hypothesis of this paper is not supported by the sample data. Instead, the results suggest that CEO gender does not affect the likelihood of real earnings management. This contributes to the literature by shedding light on the effect of CEO gender on the extent of real earnings management.

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