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Discussion of: Rank and file employees and the discovery of misreporting: The role of stock options

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  • Sloan, Richard G.

Abstract

Call, Kedia and Rajgopal (2016) provide intriguing evidence concerning the apparent role of employee stock options in inducing rank and file employees to be complicit in corporate misconduct. They conclude that granting options to rank and file employees provides incentives for them to facilitate misreporting and discourages them from whistleblowing. In this discussion, I argue that the evidence is largely circumstantial and puzzling in several respects. I conclude that while Call et al. have identified intriguing evidence, further research is required to rule out alternative explanations and to better understand employees’ motives.

Suggested Citation

  • Sloan, Richard G., 2016. "Discussion of: Rank and file employees and the discovery of misreporting: The role of stock options," Journal of Accounting and Economics, Elsevier, vol. 62(2), pages 301-304.
    • Handle: RePEc:eee:jaecon:v:62:y:2016:i:2:p:301-304
    DOI: 10.1016/j.jacceco.2016.10.002
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    1. Patricia M. Dechow & Richard G. Sloan & Amy P. Sweeney, 1996. "Causes and Consequences of Earnings Manipulation: An Analysis of Firms Subject to Enforcement Actions by the SEC," Contemporary Accounting Research, John Wiley & Sons, vol. 13(1), pages 1-36, March.
    2. Call, Andrew C. & Kedia, Simi & Rajgopal, Shivaram, 2016. "Rank and file employees and the discovery of misreporting: The role of stock options," Journal of Accounting and Economics, Elsevier, vol. 62(2), pages 277-300.
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    Cited by:

    1. Muzhi Wang & Weichen Yan, 2022. "Brain Gain: The Effect of Employee Quality on Corporate Social Responsibility," Abacus, Accounting Foundation, University of Sydney, vol. 58(4), pages 679-713, December.

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