Transparency or Ambiguity? Chief Finance Officer Gender and Earnings Management: The Moderating Role of Voluntary Disclosure in Kenya
Main Article Content
Keywords
Real earnings management, voluntary disclosure, listed firms, gender, Chief Finance Officer
Abstract
A burgeoning area of research in the field of accounting concerns earning management. Despite several accounting and financial regulations, accounting scandals continue to occur on a global scale. The purpose of this study was to examine the moderating effect of voluntary disclosure on the relationship between Chief Finance Officer attributes and earning management among listed firms in Kenya. Specifically, the study will seek to determine the effect chief finance officer gender on the real earning management among listed firms at the Nairobi Securities Exchange. The study also examined the moderating role of voluntary disclosure on the relationship between chief finance gender and real earning management. Longitudinal research design and a panel approach was adopted to establish the causal relationship between the study’s variables. Secondary data for the study for the period between 2010-2020 was extracted from annual financial statements of 68 listed firms. A Hierarchical Multiple Linear regression model will be used to analyze relationships and the effect of the study variables. The study findings established that chief finance officer gender (β = -3.664, p< 0.05) had a negative and significant on earnings management. Additionally, the results established that show that voluntary disclosure moderates the relationship between chief finance officer gender and earnings management (β = -20.442, p = 0.000). The study contributes to knowledge by revealing new insights that voluntary disclosure moderates the relationship between chief finance officer attributes and earnings management. The study recommends that Regulators should consider the significant roles played by chief finance officer attributes and voluntary disclosure in reducing earnings manipulation and hence, should encourage companies to appoint chief finance officer with relevant skills and the stated attributes to properly manage their businesses. In addition, corporate governance practices should be emphasized in all practices and disclosure levels should not be restricted to annual reports only as the figures on the annual reports may not disclose all the information that investors may require to aid in decision making.
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Hadija Wako , School of Business and Economics, Department of Accounting and Finance, Moi University, P. O. Box 3900 - 30100, Kesses, Eldoret, Kenya
School of Business and Economics, Department of Accounting and Finance, Moi University, Kenya
Stephen Chelogoi , School of Business and Economics, Department of Accounting and Finance, Moi University, P. O. Box 3900 - 30100, Kesses, Eldoret, Kenya
School of Business and Economics, Department of Accounting and Finance, Moi University, Kenya
John Tarus , School of Business and Economics, Department of Accounting and Finance, Moi University, P. O. Box 3900 - 30100, Kesses, Eldoret, Kenya
School of Business and Economics, Department of Accounting and Finance, Moi University, Kenya