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Impact of CEO-board social ties on accounting conservatism: Internal control quality as a mediator

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  • Yin, Meiqun
  • Zhang, Jidong
  • Han, Jing

Abstract

The paper aims to explore the association between CEO-board social ties and accounting conservatism. We found there is a negative relationship between CEO-board social ties and accounting conservatism. It implies that more CEO-board social ties reduce board’s monitoring function and encourage CEO’s tendency to adopt less conservative principles for their own personal gains. We also found the mediating effect of the quality of internal control system between CEO-board ties and accounting conservatism. This piece of finding further implies that the internal control system decided by the board could be the means via which CEO realizes less conservative principles. Contributions, limitations, and implications to corporate governance as well as security exchange commission are also discussed.

Suggested Citation

  • Yin, Meiqun & Zhang, Jidong & Han, Jing, 2020. "Impact of CEO-board social ties on accounting conservatism: Internal control quality as a mediator," The North American Journal of Economics and Finance, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:ecofin:v:52:y:2020:i:c:s1062940820300693
    DOI: 10.1016/j.najef.2020.101172
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