Gambling Attitudes and Financial Misreporting

Posted: 2 Jun 2017

See all articles by Dane M. Christensen

Dane M. Christensen

University of Oregon

Keith L. Jones

University of Kansas

David G. Kenchington

Arizona State University (ASU) - School of Accountancy

Date Written: May 30, 2017


We investigate whether attitudes toward gambling help explain the occurrence of intentional misreporting. Similar to gambling, some financial reporting choices involve taking deliberate, speculative risks. We predict that in places where gambling is more socially acceptable, managers will be more likely to take financial reporting risks that increase the likelihood the financial statements will need to be restated. To test this prediction, we exploit geographic variation in local gambling attitudes and find that restatements due to intentional misreporting are more common in areas where gambling is more socially acceptable. This association is even stronger in situations where management is under greater pressure to misreport, including when the firm is: close to meeting a performance benchmark, experiencing poor financial performance, or under investment-related pressure. Furthermore, these results are robust to numerous tests to address omitted variables and endogeneity. Collectively, these findings suggest gambling attitudes help explain the incidence of intentional misreporting.

Keywords: Gambling, Attitudes, Misreporting, Irregularities

JEL Classification: K42, M14, M41, M42, R10

Suggested Citation

Christensen, Dane M. and Jones, Keith Lamar and Kenchington, David G., Gambling Attitudes and Financial Misreporting (May 30, 2017). Contemporary Accounting Research, Forthcoming, Available at SSRN:

Dane M. Christensen (Contact Author)

University of Oregon ( email )

1280 University of Oregon
Eugene, OR 97403
United States

Keith Lamar Jones

University of Kansas ( email )

1654 Naismith Drive
MS 5F4
Lawrence, KS 66045
United States
785-864-6997 (Phone)
785-864-5328 (Fax)

David G. Kenchington

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

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