Corporate Financial Leader Genders’ Effect on Financial Reporting Decisions in an Obedience Pressure Setting

The accounting profession is rules-based but requires corporate financial leaders to make judgments in applying these rules to a particular set of facts. This study focuses on how that judgment can be susceptible in an obedience pressure setting when told to change the financial statements by a superior. Specifically, this study examines the effects of chief executive officer (CEO) gender and corporate financial leader gender effects on corporate financial leader decisions in an obedience pressure setting. The study uses a 2 x 2 between-subjects experiment and practicing corporate financial leaders as participants. The results find a significant relationship between corporate financial leaders gender and corporate financial leaders judgment. Female corporate financial leaders report more conservative earnings than male corporate financial leaders in an obedience pressure environment. However, the gender of the CEO is not relevant to the decision of the corporate financial leader. The study supports occupational socialization, with corporate financial leaders prioritizing their responsibility for financial reporting quality over their relationship with the CEO.