SYNOPSIS: This study examines the association between chief executive officer (CEO) age and the financial reporting quality of firms. The financial reporting qualities examined are the meeting or beating of analyst earnings forecasts and financial restatements. Based on extant research, we hypothesize that older CEOs are associated with higher-quality financial reporting. Using a sample of 3,413 firms for the period 2005 to 2008, we find a positive association between CEO age and financial reporting quality. Specifically, we find that CEO age is negatively associated with firms meeting or beating analyst earnings forecasts and financial restatements. Our study therefore extends the corporate governance and financial reporting quality literature by identifying CEO age as a determinant of financial reporting quality. Data Availability: Data are publicly available.

Purpose -The purpose of this paper is to investigate whether gender diversity of audit committees has a significant impact on the firm's earnings management. Design/methodology/approach -This paper uses a performance-adjusted discretionary accrual model to examine the association between gender variables and the firm's earnings management. Regression analysis is applied using 320 firms from the S&P Small Cap 600. Findings -The authors find consistent evidence to show that the presence of a female director on the audit committee constrains earnings management by increasing negative (income-decreasing) discretionary accruals. Research limitations/implications -Future research can explore the behavior of female managers by applying the gender theory. Furthermore, the paper's evidence has implications for regulators and policy makers, since the presence of a female director in the audit committee may affect management decisions and audit quality in a positive way. Therefore, gender diversity on the board should be more strongly emphasized. Moreover, the presence of female members on the board may further enhance public confidence. Originality/value -This research contributes to the existing literature on gender in four aspects. First, this research provides new evidence to reinforce the existing gender literature that women are more risk averse, cautious and ethical than men. Second, the findings showcase that gender theory can be applied into the research of management behavior. Third, the findings are significantly important in contemporary corporate governance discussions over the SOX enactment and audit committee characteristics Fourth, this study sheds further light on the importance of having women on corporate boards and the positive outcomes that are associated with it, thereby serving as an encouraging force against the existence of the glass ceiling effect.

SUMMARY: Legislators, regulators, and the media have expressed concerns that auditors “lowball” the fees for initial-year audits and that such fee discounts can lead to reduced audit quality. We hypothesize that initial-year audit fee discounts will be less likely in the post-SOX period than in the pre-SOX period. Using both fee-levels and fee-changes models, we find that Big 4 clients receive initial-year audit fee discounts of about 24 percent in 2001; this finding is consistent with results from many prior studies that have examined various periods prior to SOX. However, we find that in 2005–2006 Big 4 clients pay an initial-year audit fee premium of around 16 percent. We also document that the Big 4 are much less likely to serve as a successor, following an auditor change, in 2005–2006 than in 2001. Overall, the findings suggest that concerns about initial-year audit fee discounts are not supported by empirical evidence in the post-SOX period. The results also suggest that the Big 4 have become more conservative in the post-SOX period with respect to client acceptance and pricing decisions.

Manuscript Type Empirical Research Question/Issue This study investigates the influence of CEO characteristics on internal control quality in the U.S. Research Findings/Insights Using a sample of 4,374 ExecuComp non‐financial firms, we find that CEO entrenchment and age are significantly associated with a material internal control weakness disclosure (MW) under Sarbanes‐Oxley Section 404 (SOX 404). Our results demonstrate that entrenchment and age may affect CEOs' behavior in response to the SOX 404 internal control requirements. Theoretical/Academic Implications This study provides empirical support for the influence of CEO characteristics on material internal control weakness. As a result, the effects of internal control mechanisms are likely to be decreased in firms with entrenched and younger CEOs, consistent with entrenchment theory. Practitioner/Policy Implications This study offers insights to regulators and lawmakers interested in the effects of CEO characteristics on internal control weakness. Importantly, it points out that CEO entrenchment and age are likely to affect the strength of internal control mechanisms.