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Utilising a novel proxy for CEO religiosity that is based on graduation from a religious university, we document evidence that a CEO's religiosity improves financial reporting quality. This effect is more pronounced when the firm is located in an area with higher geographical religiosity or more social capital, suggesting that a favourable environment facilitates the CEO religiosity effect. We also find that analyst forecasts are more accurate for firms led by a religious CEO, and that fewer analysts follow such firms, consistent with the view that there is less need for analyst service if the firm provides high-quality information. We develop a series of tests to alleviate endogeneity concerns, including a reverse causality test, a difference-in-differences test based on a sample of exogenous CEO turnovers, and a placebo test. Our evidence suggests a causal explanation of the effect of CEO religiosity on financial reporting quality.

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