CFO Gender and Accruals Quality

SYNOPSIS: The authors examine the association between chief financial officer (hereafter, CFO) gender and the quality of accruals. Based on findings in prior research on gender differences in a variety of decision settings-risk-taking attitudes, financial judgments, and regulatory compliances-they hypothesize that firms with female CFOs will have higher quality of accruals. The empirical findings, based on a sample of 1,559 (1,222) firms in 2005 (2004), support this hypothesis. The study shows that companies with female CFOs have lower performance-matched absolute discretionary accruals and lower absolute accrual estimation errors, after controlling for other factors that prior research has shown to be associated with accruals.