Discussion of Chief Executive Officer Equity Incentives and Accounting Irregularities

摘要

AJL contribute new findings to the growing body of research on incentives and accounting manipulation, and they contribute a new technique to the accounting literature as a whole. Their propensity score approach offers an alternative to multiple regression that does not assume linearity and that allows an explicit assessment for the sensitivity of the results to endogeneity bias (correlated omitted variables bias). In a "partial match" conditional logistic regression of AAERs from 1992 to 2001, AJL find a positive relation between incentives and fraud that is consistent with Johnson, Ryan, and Tian [2009].