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Managerial incentives and auditor pricing

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Date Issued:
2009
Summary:
I investigate whether and how auditors address the potential risk of CEO incentive pay and CEO incentives from their equity portfolio as an incentive to commit fraud through their pricing decisions. Using an OLS regression model I find that auditors price CEO incentive pay in the post SOX period. Also, auditors price CEOs' non-linear incentives from their holdings of stock options as a fraud risk factor but do not price linear incentives from CEO holding of stock and restricted stock. Furthermore, auditors consider CEO incentives to manipulate firm performance due to the vested portion of option holdings as a fraud risk factor which is priced, and not the unvested portion of this portfolio. Furthermore, I find evidence to suggest that auditors price CEO opportunity to commit fraud, as well as CEO rationalizing the act of committing fraud, therefore concluding that auditors price all components of the fraud triangle.
Title: Managerial incentives and auditor pricing: do auditors price risk from CEO incentives?.
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Name(s): Kannan, Yezen H.
Florida Atlantic University
College of Business
School of Accounting
Type of Resource: text
Genre: Electronic Thesis Or Dissertation
Issuance: monographic
Date Issued: 2009
Publisher: Florida Atlantic University
Physical Form: electronic
Extent: ix, 132 p. : ill.
Language(s): English
Summary: I investigate whether and how auditors address the potential risk of CEO incentive pay and CEO incentives from their equity portfolio as an incentive to commit fraud through their pricing decisions. Using an OLS regression model I find that auditors price CEO incentive pay in the post SOX period. Also, auditors price CEOs' non-linear incentives from their holdings of stock options as a fraud risk factor but do not price linear incentives from CEO holding of stock and restricted stock. Furthermore, auditors consider CEO incentives to manipulate firm performance due to the vested portion of option holdings as a fraud risk factor which is priced, and not the unvested portion of this portfolio. Furthermore, I find evidence to suggest that auditors price CEO opportunity to commit fraud, as well as CEO rationalizing the act of committing fraud, therefore concluding that auditors price all components of the fraud triangle.
Identifier: 417647977 (oclc), 210448 (digitool), FADT210448 (IID), fau:3406 (fedora)
Note(s): by Yezen H. Kannan.
Thesis (Ph.D.)--Florida Atlantic University, 2009.
Includes bibliography.
Electronic reproduction. Boca Raton, Fla., 2009. Mode of access: World Wide Web.
Subject(s): Portfolio management
Incentive awards
Compensation management
Financial services industry -- Corrupt practices
Held by: FBoU FAUER
Persistent Link to This Record: http://purl.flvc.org/FAU/210448
Use and Reproduction: http://rightsstatements.org/vocab/InC/1.0/
Host Institution: FAU