Incentives to Cheat: The Influence of Executive Compensation and Firm Performance on Financial Misrepresentation

By Jared D. Harris, Philip Bromiley. Organ. Sci., 2007

702 citations recorded by the source corpus.

Subfields: Accounting, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/21a2148748bf55692264796b0411cb441ebf6473

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Citations in the corpus

Why 'Good' Firms Do Bad Things: The Effects of High Aspirations, High Expectations and Prominence on the Incidence of Corporate Illegality (2010, unknown): “To date, Harris and Bromiley (2007) is the only research we are aware of that has addressed the effects of relative performance on corporate malfeasance, and this study focused primarily on performance below aspirations.”
How firms respond to financial restatement : CEO successors and external reactions (2014, methodology): “Similarly, as such an illegitimate action violates institutional norms and societal values, financial restatement may cause stakeholders and observers to perceive the firm as flawed and discredited (Harris & Bromiley, 2007).”
6 Pay and Performance: Individuals, Groups, and Executives (2009, background): “18) to executive PFP in that it may motivate undesired or “untoward activities” (eg, misrepresentation of earnings (Harris & Bromiley, 2007 )) despite being designed with the intent of aligning interests of executives with those of shareholders.”
What monetary rewards can and cannot do: How to show employees the money (2013, background): “First, generous amounts of monetary incentives sometimes fail to motivate (Beer & Cannon, 2004) and may even lead to counterproductive outcomes such as financial misrepresentation activities (Harris & Bromiley, 2007).”
Institutional investors, shareholder activism, and earnings management (2011, background): “A report by the U.S. General Accounting Office (GAO) indicates that during the period 1997–2002 almost 10% of all public companies restated their financial statements due to accounting irregularities, with an accompanying $100 billion wipeout of market value (Harris & Bromiley, 2007).”
The Behavioral Theory of the Firm: Assessment and Prospects (2012, background): “A relation from performance to organizational fraud has been suggested, as organizations under pressure to obtain or retain satisfactory performance levels may resort to accounting violations or other misconduct (Greve, Palmer, & Pozner, 2010 ; Harris & Bromiley, 2007 ; Mishina, Dykes, Block, & Po”
Organizational Aspirations, Reference Points, and Goals (2012, background): “…(Greve, 2003c), deviant or corrupt behaviors (Lehman & Ramanujam, 2009), operational behaviors, image building rather than substantive change (Harris & Bromiley, 2007), social decisions such as environmental sustainability, long-term decisions such as capability building, and nonstrategic…”
Family Control, Socioemotional Wealth and Earnings Management in Publicly Traded Firms (2014, background): “Discretionary accruals also provide a rich measure of the degree of earnings management, as opposed to the binary and less nuanced approach of using earnings restatements (the latter have been used for example by Harris and Bromiley 2007; Zhang et al. 2008).”