Chief Executive Office Characteristics Effect on Financial Reporting Quality in Vietnam: The Moderating Role of Firm Size

Abstract

Background: Research on financial reporting quality and the impact of Chief Executive Office

 (CEO) on financial reporting quality is an issue of interest to academics.

Objective: The study aims to assess the impact of the CEO composite index on financial reporting quality (FRQ) and examine the moderating role of firm size on the relationship between the CEO and financial reporting quality in listed companies in Vietnam.

Methodology: The study uses a data sample of 459 Vietnamese listed companies in the period 2016 to 2023, through Feasible Generalized Least Squares (FGLS) regression with the dependent variable representing the quality of financial statements measured by the E Score model.

Result: This result shows that the CEO representative composite factor has a significant impact on the FRQ of the enterprise. In addition, the study also found the moderating role of firm size (FS) in the relationship between CEO and FRQ.

Conclusion: The  more positive characteristics that a CEO possesses, the more likely they are to enhance FRQ. In addition, FS plays a positive moderating role in the relationship between CEO and FRQ in listed firms in Vietnam.

Unique contributions: This study has contributed to the understanding  of the significant positive impact of CEO on FRQ in listed companies in Vietnam. This study also demonstrated the essential role of FS in improving FRQ and controlling CEO behaviour.

Key Recommendations: Future studies should examine  other factors on CEOs, to explore in more detail FRQ in the Vietnamese market.