Research On The Influence Of Differences Between The Background Characteristics Of CEO And CFO On Earning Management

In our capital market, listed companies manipulate profits by abusing accounting activities, hindering the normal development of security market and efficient allocation of resources. This article studies on the influence of differences between the background characteristics of CEO and CFO on earning managementOn basis of high-order theory, similarity-attraction theory and a huge amount of documentations, this article puts forward 5 hypothesis and conducts empirical studies as following: Firstly, this article analyzes the relation between the differences among 5 background characteristics of CEO and CFO and the degree of earnings management, and further subdivides the direction of earnings management. Secondly, this article explores the relation between the differences among 5 background characteristics of CEO and CFO and the enterprise earnings management with general manager as the centering power and motivator, and under the restriction of enterprise financing.Research indicates that gender gap of CEO and CFOs could lead to enterprise earnings management behaviors, while the age gap and the gap in office taking period of them could be conducive to restraining enterprise earnings management behaviors and the gap in educational background and family background of CEO and CFOs won’t affect enterprise earnings management behaviors. Furthermore, under the restriction of CEO power, CEO motivation, and enterprise financing restriction, CEO power affects the influence of CEO and CFO gender difference, the difference of office taking period of CEO and CFO on enterprise earnings management. When the CEO power is comparatively big, the negative influence of CEO and CFO gender gap on enterprise earnings management will be reduced and the positive effects of CEO and CFO office taking period on enterprise earnings management will be reduced. The CEO motivation affects the positive influence of CEO and CFO gender gap on enterprise earnings management. When the CEO motivation is comparatively big, the positive influence of the gender gap of both on enterprise earnings management will be reduced. Enterprise financing restriction affects the influence of CEO and CFO educational background on enterprise earnings management. When enterprise faces comparatively big financing restriction, the educational background of both will lead to enterprise earnings management.This article not only makes high-order theory more applicable, but also expand researches on enterprise earnings management behaviors. This articles finds that the gaps of background characteristics between CFO and CEO could significantly affect the degree of earnings management. In addition, aiming to provide some fresh reference for enterprises to recruit top managers and for relevant institutions to supervise earnings quality.