Incentives to Cheat: The Influence of Executive Compensation and Firm Performance on Financial Misrepresentation

• Published in: Organization science (Providence, R.I.) Vol. 18; no. 3; p. 350
• Main Authors: Harris, Jared, Bromiley, Philip
• Format: Journal Article
• Language: English
• Published: Linthicum Institute for Operations Research and the Management Sciences 01.05.2007
• Subjects: Correlation analysis; Executive compensation; Financial restatements; Financial statements; Misrepresentation; Organizational behavior; Studies; United States > US

Despite the many undesirable outcomes of corporate misconduct, scholars have an inadequate understanding of corporate misconduct's causes and mechanisms. We extend the behavioral theory of the firm, which traditionally assumes away the possibility of firm impropriety, to develop hypotheses pred...