Steven Mitsuda

Steven Mitsuda
PhD Program, Accounting
PhD Program Office
Graduate School of Business
Stanford University
655 Knight Way
Stanford, CA 94305

Steven Mitsuda

Research Interests
Managerial Incentives
Earnings Management
Financial Statement Quality
Audit Quality

Job Market Paper

The Effect of Chief Accounting Officers on Financial Reporting Quality PDF
I examine the effect of Chief Accounting Officers (CAOs) on financial reporting quality. I proxy for financial reporting quality using severe and non-severe restatements, abnormal accruals, just meeting or beating analyst forecasts, and internal control weaknesses (ICWs). I find that firms with CAOs have lower rates of severe restatements, just meet-or-beats, and ICWs. These results are consistent with the CAO improving financial reporting quality. I further structure tests that control for the firm’s endogenous choice to appoint a CAO, results are generally consistent. I also test financial reporting quality by examining earnings management around seasoned equity offerings. I find that accruals earnings management is mitigated in CAO firms. Next, I check CAO, CEO, and CFO compensation and career concerns to determine if differences in incentives drive these findings. CAO turnover occurs in the years around restatements and ICWs. I also find that CAO tenure is negatively associated with severe restatements, abnormal accruals, just meet-or-beats, and ICWs. Overall, these results suggest that having a designated CAO is associated with various improvements in financial reporting quality and that these improvements are related to the CAO's tenure within the firm.
Last Updated 14 Nov 2019