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Career concerns for revealing misreporting

Author

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  • Quinn D. Curtis

    (University of Virginia)

  • Justin J. Hopkins

    (The Darden Graduate Business School at the University of Virginia)

Abstract

We examine whether revealing misreporting affects the careers of executives and independent directors. To isolate the effects of revealing misreporting from the underlying malfeasance, we analyze executives and directors who joined firms after stock option backdating ceased, but who were in place to determine how the firm would respond to the unfolding backdating crisis. Overall, these new executives and directors faced career penalties at firms that issued a backdating restatement relative to those at firms that remained silent despite strong evidence of backdating having occurred. We conduct a variety of tests to rule out alternative explanations, and conclude that new executives and directors face career penalties after firms reveal misreporting.

Suggested Citation

  • Quinn D. Curtis & Justin J. Hopkins, 2022. "Career concerns for revealing misreporting," Review of Accounting Studies, Springer, vol. 27(1), pages 1-34, March.
    • Handle: RePEc:spr:reaccs:v:27:y:2022:i:1:d:10.1007_s11142-021-09599-4
    DOI: 10.1007/s11142-021-09599-4
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