search query: @indexterm SECURITIZATION / total: 24
reference: 2 / 24
| Author: | Dechow, P.M. Myers, L.A. Shakespeare, C. |
| Title: | Fair value accounting and gains from asset securitizations: A convenient earnings management tool with compensation side-benefits |
| Journal: | Journal of Accounting & Economics
2010 : FEB, VOL. 49:1-2, p. 2-25 |
| Index terms: | securitization earnings compensation corporate governance chief executive officers |
| Language: | eng |
| Abstract: | Accounting rules for valuing retained interest from securitizations need management to make assumptions concerning discount rates, default rates, and prepayment rates, which provide management with discretion to determine the "gain on sale" of the receivables. This paper examines whether CEO compensation is less sensitive to securitization gains than to other earnings components in the presence of proxies for how independent and informed directors are. It focuses on the accounting for the securitizations, investigating consequences of accounting rules that allow for the derecognition of receivables. The results show that CEOs are rewarded for the gains they report and boards do not intervene, but they do not suggest that better "monitoring" reduces earnings management or CEO pay sensitivity to reported securitization gains. |
SCIMA