Female CFO, Incentives And Accounting Conservatism

With the continuous progress and development of social civilization,the social status of women has been significantly improved.More and more attention has been paid to the heterogeneity of the company executives,and the female executives play a decisive role in corporate governance.Compared with male executives,the two characteristics of female executives are risk aversion and ethical sensitivity,and the heterogeneity of executive gender affects the company's production and management and financial behavior.On the other hand,the accounting conservatism is a kind of financial reporting mechanism,so the level of accounting conservatism of listed companies will have a significant impact on the company's financial planning and business decisions.What's more,CFO is one of the most important and valuable executives in the enterprise,who has more dominant in the financial sector,therefore,the characteristics of CFO's impact on accounting conservatism can't be ignored.Moreover,in order to alleviate agency problems,companies usually take incentives to executives,such as salary incentives,equity incentives,etc.,to align the interests of the owners and managers of the company.Then,the company's incentives to female CFO may affect the financial decisions.In addition to the company's internal governance factors,the external market environment of the company may also affect the relationship between CFO and accounting conservatism.Based on the data of 280 private listed firms in the years of 2004-2014,this paper uses the company's annual CSCORE index to reflect the accounting conservatism,which was established by Khan and Watts in 2009,and investigates the impact of female CFO,female CEO and the incentive measures of female CFO on accounting conservatism.Furthermore,it studies the relationship between female CFO and accounting conservatism under the action of product market competition.The results show that,female CFO significantly enhance the accounting conservatism,however,female CEO significantly reduced the accounting conservatism.Moreover,the compensation,equity and controlling power incentives of female CFO reduce the accounting conservatism of the company.A further analysis finds that product market competition strengthens the positive effect of female CFO on the accounting conservatism.On the basis of the research conclusions,combined with China's national conditions,this paper puts forward some policy suggestions,that is to establish a more perfect internal control system and external audit system,and promote the market-oriented operation of enterprises.This research expands the economic research consequences of female CFO in corporate decision-making.What's more,combined the research with the external market environment,it also provides more empirical evidence for the impact factors of executive heterogeneity and accounting conservatism.