Leder hög bonus till sämre redovisningskvalitet

Sammanfattning: This paper seeks to investigate whether there is a positive relationship between bonus as a part of total executive compensation and lower accounting quality among Swedish companies. In this study, accounting quality is defined as the degree by which a company's earnings are subject to earnings management. To detect earnings management accrual-based modified Jones model is applied to companies listed on the Large-, Mid- and Small-Cap lists on the Stockholm stock exchange during 2011. We find a statistically significant positive relationship between bonus as a part of total executive compensation and lower accounting quality. Thus, in line with prior research, our results suggest that managers, interested in maximizing their bonus, will select income increasing accruals to manage earnings upwards. However, this study does not account for the existence of upper or lower bounds on bonus plans and exclude a substantial number of companies reporting zero bonus pay. As a result, it is likely that we over- or underestimate the relationship between bonus as a part of total executive compensation and accounting quality.