Female Leadership and Financial Reporting Quality: Evidence from Earnings Management in Swedish Firms

Sammanfattning

This thesis examines whether executive gender is associated with accrual-based earnings management (AEM) in Swedish listed firms by analyzing the roles of the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), and the gender composition of the CEO–CFO dyad. Grounded in Upper Echelons Theory, Agency Theory, Managerial Discretion Theory, and the Structural Approach, the study integrates both individual-level and dyadic perspectives to assess whether gender-related executive differences translate into observable variation in financial reporting behavior.The analysis employs a panel-data design covering Swedish publicly listed firms over the period 2017–2024. Financial reporting quality is proxied by absolute discretionary accruals estimated using the performance-adjusted Modified Jones Model. The empirical analysis is based on approximately 2,000 firm-year observations, depending on model specification. The hypotheses are tested using ordinary least squares (OLS) regressions with firm-level clustered standard errors and industry and year fixed effects. The explanatory variables include CEO gender, CFO gender, dyad diversity, and two role-specific dyadic configurations: Female CEO–Male CFO (FM) and Male CEO–Female CFO (MF).The results do not reveal statistically significant associations between AEM and any of the executive gender variables examined. This overall pattern remains stable in robustness analyses using firm fixed-effects models. The findings align more closely with conditional interpretations grounded in Managerial Discretion Theory and the Structural Approach than with strong universal predictions of gender-based behavioral effects on reporting outcomes.The thesis contributes to the earnings management literature by providing evidence from a high-governance Nordic setting characterized by strong monitoring, institutional transparency, and established reporting routines, conditions that may attenuate the visibility of executive-level gender differences in accrual-based measures of reporting quality. By integrating CEO gender, CFO gender, and CEO–CFO dyadic configurations within one empirical framework, the study extends prior research that has typically examined these roles separately. More broadly, the findings highlight the importance of institutional context in moderating the relationship between executive characteristics and financial reporting outcomes.