| Summary: | 碩士 === 國立成功大學 === 會計學系 === 106 === This study investigates the relationship between CEO duality and the quality of non-GAAP earnings. Using the firm-quarter observations of the U.S. firms from 1997 to 2008, this study finds the relationship between CEO duality and the persistence of non-GAAP earnings. Specifically, this study finds exclusions from non-GAAP earnings have larger implications for future earnings when CEO duality is present. Moreover, this study documents a positive moderating effect of board independence on the relationship between CEO duality and the persistence of non-GAAP earnings. Our evidence shows that if the CEO is also the chairman of the board, having rights of decision making and decision performance, it will severely reduce the board’s capability of monitoring. Consequently, CEO-Chair have more spaces and chances to do managerial opportunism by manipulating non-GAAP earnings, making the quality of non-GAAP earnings worse. In addition, outside boards not only provide professional suggestion, but also increase the performance of corporate governance and strengthen the monitoring functions of board. Therefore, as the proportion of independent director rises, it can prohibit the CEO-Chair’s opportunistic behavior, then making the quality of no-GAAP earnings improved. Moreover, we also find that after implementing SOX, the quality of non-GAAP earnings becomes better. The negative impact on non-GAAP earnings by CEO duality is also restrained, and the positively mitigated effect by independent boards declines.
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