Exploring the relationship between CEOs’ education, REM, integrated reporting quality and firm performance during merger and acquisition: moderated-mediation analysis

Purpose This paper aims to provide deeper insights into the mediating effect of real earnings management (REM) on the relationship between chief executive officers’ (CEOs) accounting education and firm performance while exploring how integrated reporting quality (IRQ) moderates this relationship in mergers and acquisition (M&A) context. Design/methodology/approach Data from 203 US merged and acquiring firms were selected from the S&P 500 index between 2012 and 2022. The authors used the feasible generalized least squares method, estimated on panel data. Findings In the instance of US merged and acquiring firms, the findings indicate that CEOs accounting education have a positive effect on firm performance; however, the magnitude of this effect does not depend on IRQ. Also, when examining the relationship between CEO accounting education and IRQ on REM, this study found that CEOs with accounting education tend to mitigate REM practices by implementing responsible governance. Besides, the regression results show that REM mediates CEO accounting education and firm performance relationship. Practical implications The findings are intriguing for stakeholders and investors, who may exert pressure on M&A companies to improve the transparency of their accounting practices and decrease the propensity for engaging in REM practices by focusing on IRQ and enhancing overall performance. Originality/value This study can enhance knowledge and understanding of how a CEO’s accounting education influences firm performance. Using data from M&A activities in the USA, this research bridges a gap by investigating the mediating effect of REM activities on the relationship between CEOs’ accounting education and firm performance, moderated by IRQ.