Managing Earnings for My Boss? Financial Reporting and the Balance of Power between CEOs and CFOs

This paper investigates how the use of earnings management and aggressive financial reporting is related to the balance of power between chief executive officers (CEOs) and chief financial officers (CFOs). I use nationwide awards that recognize CFO excellence as exogenous shocks to the CFO job-market status. I find that, compared to their matched non-awardee counterparts, awardee CFOs experience a sharp increase in career opportunities, total compensation, and stock/option grants, as well as a substantial decrease in CEO power over them. Consistent with the view that shifts in bargaining power between the CEO and CFO matter in earnings management, I find that awardees’ firms have a significantly smaller magnitude of discretionary accruals than both non-awardees and pre-award periods. In addition, winning the award has a substantially negative effect on positive accruals, while the positive effect on negative accruals is less significant. Moreover, the award effects on reducing the magnitude of discretionary accruals are significant only when CFOs face powerful CEOs. I also find evidence that earnings restatements among firms with awardees are less common and receive a less negative market reaction. Overall, my findings suggest that the balance of power between CEOs and CFOs plays an important role in the quality of financial reporting

Winning an Award Could Set You Free: Earnings Management and the Balance of Power between CEOs and CFOs

This paper investigates how the balance of power between chief executive officers (CEOs) and chief financial officers (CFOs) influences the use of earnings management. I employ nationwide awards that recognize CFO excellence as shocks to awardees’ job-market status and use a regression discontinuity design (RDD) to establish causal effects. I find that, compared to nominees who were close to winning the award, awardee CFOs experience a sharp increase in career opportunities, both outside and inside their own firms. Consistent with the view that shifts in bargaining power between the CEO and CFO can mitigate earnings management, I find that awardee firms have a significantly smaller magnitude of discretionary accruals than nominees in the first two years after the award. In addition, winning the award has a substantially negative effect on positive accruals, while the positive effect on negative accruals is less significant. Moreover, I find no evidence that the rise of CFO power triggers an increase in the use of real earnings management in awardee firms. Overall, my findings suggest that the balance of power between CEOs and CFOs plays an important role in the quality of financial reporting

Growing Pains or Confidence? CEO Relative Age, Stress, and Firm Performance

CEOs face tremendous stress at work. Motivated by the psychological literature that self-efficacy helps people overcome stress, we examine if the self-efficacy of CEOs alleviates their stress and improves their firms’ performance. Using CEOs’ relative age, i.e., age in kindergarten due to state-level eligibility cutoff date, as a proxy for the CEOs’ self-efficacy, we find that CEOs with higher self-efficacy generate better firm performance, especially in high-stress situations such as industry downturn, expansion into a new sector, mergers and acquisitions, and innovation. While existing literature documents negative impacts of CEO overconfidence, our findings suggest that the confidence of CEOs can be beneficial to their firms

Room-temperature ferromagnetism in epitaxial bilayer FeSb/SrTiO3(001) terminated with a Kagome lattice

Two-dimensional (2D) magnets exhibit unique physical properties for potential applications in spintronics. To date, most 2D ferromagnets are obtained by mechanical exfoliation of bulk materials with van der Waals interlayer interactions, and the synthesis of single or few-layer 2D ferromagnets with strong interlayer coupling remains experimentally challenging. Here, we report the epitaxial growth of 2D non-van der Waals ferromagnetic bilayer FeSb on SrTiO3(001) substrates stabilized by strong coupling to the substrate, which exhibits in-plane magnetic anisotropy and a Curie temperature above 300 K. In-situ low-temperature scanning tunneling microscopy/spectroscopy and density-functional theory calculations further reveal that a Fe Kagome layer terminates the bilayer FeSb. Our results open a new avenue for further exploring emergent quantum phenomena from the interplay of ferromagnetism and topology for application in spintronics

Protein phosphorylation-acetylation cascade connects growth factor deprivation to autophagy

Different from unicellular organisms, metazoan cells require the presence of extracellular growth factors to utilize environmental nutrients. However, the underlying mechanism was unclear. We have delineated a pathway, in which glycogen synthase kinase 3 (GSK3) in cells deprived of growth factors phosphorylates and activates the acetyltransferase KAT5/TIP60, which in turn stimulates the protein kinase ULK1 to elicit autophagy. Cells with the Kat5/Tip60 gene replaced with Kat5(S86A) that cannot be phosphorylated by GSK3 are resistant to serum starvation-induced autophagy. Acetylation sites on ULK1 were mapped to K162 and K606, and the acetylation-defective mutant ULK1(K162,606R) displays reduced kinase activity and fails to rescue autophagy in Ulk1(-/-) mouse embryonic fibroblasts, indicating that acetylation is vital to the activation of ULK1. The GSK3-KAT5-ULK1 cascade seems to be specific for cells to sense growth factors, as KAT5 phosphorylation is not enhanced under glucose deprivation. Distinct from the glucose starvation-autophagy pathway that is conserved in all eukaryotic organisms, the growth factor deprivation response pathway is perhaps unique to metazoan organisms.973 Program [2011CB910800]; NSFC [31130016, 30921005, 31000621]; Fundamental Research Funds for the Central Universities [2010121094]; MOE of China [B06016

Genetic Analysis of Avian Gyrovirus 2 Variant-Related Gyrovirus Detected in Farmed King Ratsnake (Elaphe carinata): The First Report from China

Avian gyrovirus 2 (AGV2), which is similar to chicken infectious anemia virus, is a new member of the genus Gyrovirus. AGV2 has been detected not only in chicken but also in human tissues and feces. This study analyzed 91 samples (8 from liver tissue and 83 from fecal samples) collected from king ratsnakes (Elaphe carinata) from 7 separate farms in Hubei and Henan, China, for AGV2 DNA using PCR. The results demonstrated a low positive rate of AGV2 (6.59%, 6/91) in the snakes, and all the positive samples were collected from the same farm. The AGV2 strain HB2018S1 was sequenced, and its 2376 nt genome comprised three partially overlapping open reading frames: VP1, VP2, and VP3. Phylogenetic analysis revealed that the HB2018S1 and NX1506-1 strains from chickens in China belong to the same clade and that they have a nucleotide identity as high as 99.5%. Additionally, recombination analysis showed that HB2018S1 might originate from the recombination of viruses similar to those detected in chickens and a ferret. A total of 10 amino acid mutation sites (44(R/K), 74(T/A), 256 (C/R), 279(L/Q), and 373(V/A) in AGV2 VP1; 60(I/T), 125(T/I), 213(D/N), and 215(L/S) in AGV2 VP2; and 83(H/Y) in AGV2 VP3) different from those observed in most reference strains were found in the genome of HB2018S1, indicating that the differences may be related to a transboundary movement among hosts, which needs further elucidation. To the best of our knowledge, this study is the first report on an AGV2-infected poikilotherm, suggesting that cross-host transmission of viruses with circular single-stranded DNA genomes would be a public health concern

High sensitivity of semimetal photodetection via Bose–Einstein condensation

Abstract The discovery of semiconductor has witnessed remarkable strides toward high performance of photodetectors attributed to its excellent carrier properties. However, semimetal, owning to the high carrier concentration and low carrier mobility compared to those of semiconductor, is generally considered unsuitable for photodetection. Herein, we demonstrate an outstanding photodetection in a layered semimetal titanium diselenide (TiSe2) in Bose–Einstein condensation (BEC) state. High sensitivity of semimetal photodetector is realized in the range of visible, infrared and terahertz bands. The noise equivalent power (NEP) has threefold improvement at the visible and infrared wavebands, and significant decrease by one order of magnitude in the terahertz frequencies via BEC phenomenon, attributed to the electrical parameter variation after condensation. The best NEP value in the terahertz frequency is comparable to that of commercial Si photodetector. Our results show another recipe to fabricate high performance of photodetection via semimetal except for semiconductor and pave the way to exploit macroscopic quantum phenomena for optoelectronics

Gelsolin, but not its cleavage, is required for TNF-induced ROS generation and apoptosis in MCF-7 cells

The tumor necrosis factor (TNF) can induce apoptosis in many cells including MCF-7 cells. To identify the genes responsible for TNF-induced apoptosis, we generated a series of TNF-resistant MCF-7 cell lines by employing restrovirus insertion-mediated random mutagenesis. In one of the resistant lines, gelsolin was found to be disrupted by vital insertion. Exogenous expression of gelsolin in this mutant cell line (Gel(mut)) restored the sensitivity to TNF-induced cell death and knock-down of gelsolin by siRNA conferred MCF-7 cells with resistance to TNF, indicating that gelsolin is required for TNF-induced apoptosis. Interestingly, the resistance of Gel(mut) cells to apoptosis induction is selective to TNF, since Gel(mut) and wild-type cells showed similar sensitivity to other death stimuli that were tested. Furthermore, TNF-induced ROS production in Gel(mut) cells was significantly decreased, demonstrating that gelsolin-mediated ROS generation plays a crucial role in TNF-induced apoptosis in MCF-7 cells. Importantly, caspase-mediated gelsolin cleavage is dispensable for TNF-triggered ROS production and subsequent apoptosis of MCF-7 cells. Our study thus provides genetic evidence linking gelsolin-mediated ROS production to TNF-induced cell death. (C) 2009 Elsevier Inc. All rights reserved.973 Program [2007CB914602, 2006CB503900]; National Natural Science Foundation of China [30770454, 30730025]; NCETXM

Molecular Basis of Wnt Activation via the DIX Domain Protein Ccd1

Ministry of Science and Technology of China [2007CB914400, 2011CB910803]; National Natural Science Foundation of China [31070643]; Tsinghua University [09THZ02235]The Wnt signaling plays pivotal roles in embryogenesis and cancer, and the three DIX domain-containing proteins, Dvl, Axin, and Ccd1, play distinct roles in the initiation and regulation of canonical Wnt signaling. Overexpressed Dvl has a tendency to form large polymers in a cytoplasmic punctate pattern, whereas the biologically active Dvl in fact forms low molecular weight oligomers. The molecular basis for how the polymeric sizes of Dvl proteins are controlled upon Wnt signaling remains unclear. Here we show that Ccd1 up-regulates canonical Wnt signaling via acting synergistically with Dvl. We determined the crystal structures of wild type Ccd1-DIX and mutant Dvl1-DIX(Y17D), which pack into "head-to-tail" helical filaments. Structural analyses reveal two sites crucial for intra-filament homo-and hetero-interaction and a third site for inter-filament homo-assembly. Systematic mutagenesis studies identified critical residues from all three sites required for Dvl homo-oligomerization, puncta formation, and stimulation of Wnt signaling. Remarkably, Ccd1 forms a hetero-complex with Dvl through the "head" of Dvl-DIX and the "tail" of Ccd1-DIX, depolymerizes Dvl homo-assembly, and thereby controls the size of Dvl polymer. These data together suggest a molecular mechanism for Ccd1-mediated Wnt activation in that Ccd1 converts latent polymeric Dvl to a biologically active oligomer(s)