Is CEO Certification of Earnings Numbers Value-Relevant?
32 Pages Posted: 25 Apr 2007 Last revised: 12 May 2014
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Is CEO Certification of Earnings Numbers Value-Relevant?
Abstract
On June 27, 2002, the Securities and Exchange Commission of the United States ordered the CEOs and CFOs of 688 large firms to certify the earnings numbers of their companies by 5:30PM EST, August 14, 2002. This paper uses this natural experiment to find that certification was not only a non-event for the certifiers around their certification date, but it was also a non-event for the non-certifiers around August 15, 2002. Further tests make us conclude that CEO's certification of earnings numbers is not value-relevant.
Keywords: corporate governance, earnings transparency, CEO certification, credible signal, accounting regulation, Sarbanes-Oxley Act
JEL Classification: G34, G38, D84, M41, G12
Suggested Citation: Suggested Citation
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