Ceo Turnover Earnings Management

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CEO Turnover and Earnings Management in Banks

Author : Arkodipta Sarkar
Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis CEO Turnover and Earnings Management in Banks by : Arkodipta Sarkar

Download or read book CEO Turnover and Earnings Management in Banks written by Arkodipta Sarkar and published by . This book was released on 2017 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the effect of CEO turnover on earnings management in banks. Since banking is intrinsically an opaque activity, we hypothesize that an incoming CEO of a bank is more likely to manage earnings than a counterpart in a non financial firm. To identify the hypothesized effects, we exploit exogenous variation generated by age-based CEO retirement policies in Indian public sector firms. Compared to banks where there is no turnover, banks experiencing CEO turnover report 23% lower profit-to-sales and 25% lower return-on-assets in the transition quarter. This decrease occurs due to increased provisions, though such provisions do not associate with increased non-performing assets subsequently. Shorter CEO tenure exacerbates earnings management by the incoming CEO. The stock price declines by 1%, and lending is 2% lower than average, which highlight the real effects of earnings management by incoming CEOs. In contrast to banks, we observe no earnings management coinciding with CEO turnover for other public sector firms. As evidence of motivation, we show that earnings management increases likelihood of directorship positions in other firms within two years of retirement.

Earnings Management Surrounding CEO Turnover

Author : Jong-Seo Choi
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (93 download)

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Book Synopsis Earnings Management Surrounding CEO Turnover by : Jong-Seo Choi

Download or read book Earnings Management Surrounding CEO Turnover written by Jong-Seo Choi and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Earnings Management Surrounding Forced CEO Turnover

Author : Jiang Cheng
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Earnings Management Surrounding Forced CEO Turnover by : Jiang Cheng

Download or read book Earnings Management Surrounding Forced CEO Turnover written by Jiang Cheng and published by . This book was released on 2019 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we investigate earnings management surrounding forced CEO turnover for U.S. property-casualty insurance companies with differing organizational forms. We analyze the three principal organizational form types in the industry - publicly-traded stocks, closely-held stocks, and mutuals. We utilize a unique measure of earnings management, the loss reserve error. Multivariate results show that all ownership types over-state earnings during our sample period whether or not forced turnover occurs. Over-statement is highest for publicly-traded stocks, followed by closely-held stocks and mutuals. Organizational form matters in constraining managerial opportunism in the presence of forced turnovers. Incumbent CEOs of publicly-traded stocks manage earnings upward prior to forced turnovers, consistent with the cover-up hypothesis, but this hypothesis is not consistently supported for mutuals or closely-held stocks. The univariate results support the big-bath hypothesis for closely-held stocks, but the multivariate results do not support the big-bath hypothesis for any organizational form. Finally, corporate governance matters - high board independence and large board sizes are associated with less income over-statement.

CEO Turnover, Earnings Management and the Role of Corporate Governance Mechanisms

Author : Austin Lansing Reitenga
Publisher :
ISBN 13 :
Total Pages : 322 pages
Book Rating : 4.:/5 (45 download)

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Book Synopsis CEO Turnover, Earnings Management and the Role of Corporate Governance Mechanisms by : Austin Lansing Reitenga

Download or read book CEO Turnover, Earnings Management and the Role of Corporate Governance Mechanisms written by Austin Lansing Reitenga and published by . This book was released on 1998 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt:

CEO Turnover and Earnings Management in Ireland

Author : Sandra Daly
Publisher :
ISBN 13 :
Total Pages : 57 pages
Book Rating : 4.:/5 (65 download)

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Book Synopsis CEO Turnover and Earnings Management in Ireland by : Sandra Daly

Download or read book CEO Turnover and Earnings Management in Ireland written by Sandra Daly and published by . This book was released on 2004 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt:

CEO Turnover and Earnings Management in the United Kingdom

Author : Fidelma Margaret Bowe
Publisher :
ISBN 13 :
Total Pages : 60 pages
Book Rating : 4.:/5 (66 download)

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Book Synopsis CEO Turnover and Earnings Management in the United Kingdom by : Fidelma Margaret Bowe

Download or read book CEO Turnover and Earnings Management in the United Kingdom written by Fidelma Margaret Bowe and published by . This book was released on 2008 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt:

CEO Turnover and Earnings Management in Indonesia

Author : Doddy Setiawan
Publisher :
ISBN 13 :
Total Pages : 658 pages
Book Rating : 4.:/5 (96 download)

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Book Synopsis CEO Turnover and Earnings Management in Indonesia by : Doddy Setiawan

Download or read book CEO Turnover and Earnings Management in Indonesia written by Doddy Setiawan and published by . This book was released on 2015 with total page 658 pages. Available in PDF, EPUB and Kindle. Book excerpt:

CEO Turnover & Earnings Management

Author : John Manuel Barrios
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis CEO Turnover & Earnings Management by : John Manuel Barrios

Download or read book CEO Turnover & Earnings Management written by John Manuel Barrios and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a hand-collected sample of Italian family and non-family-controlled firms, we investigate the moderating effect of family ownership on the relation between earnings management and CEO turnover. Consistent with agency theory, we find a positive and significant relation between earnings management and CEO turnover in the overall sample, the association being primarily driven by non-family-controlled firms. In family-controlled firms, we find that the positive relation is reduced. Furthermore, we find the association to be insignificant in cases where the CEO is a member of the controlling family. Robustness tests rule out competing hypotheses that differences in the propensity of family and non-family firms to manage earnings and ownership concentration drive our results. Overall, this study contributes to our understanding of family ownership driven differences in corporate governance systems, a relatively unexamined topic in the literature.

Earnings Management Surrounding CEO Turnover in the Context of Malaysian Firms

Author : Ahmad Fahmi bin Sheikh Hassan
Publisher :
ISBN 13 :
Total Pages : 178 pages
Book Rating : 4.:/5 (956 download)

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Book Synopsis Earnings Management Surrounding CEO Turnover in the Context of Malaysian Firms by : Ahmad Fahmi bin Sheikh Hassan

Download or read book Earnings Management Surrounding CEO Turnover in the Context of Malaysian Firms written by Ahmad Fahmi bin Sheikh Hassan and published by . This book was released on 2006 with total page 178 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Interactive Reporting Bias Surrounding CEO Turnover

Author : Chia-Feng (Jeffrey) Yu
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Interactive Reporting Bias Surrounding CEO Turnover by : Chia-Feng (Jeffrey) Yu

Download or read book Interactive Reporting Bias Surrounding CEO Turnover written by Chia-Feng (Jeffrey) Yu and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes how CEO turnover affects successive CEOs' financial reporting decisions and the capital market price. I show that when an outgoing CEO (O) in period 1 is succeeded by an incoming CEO (N) in period 2, strategic interaction between O and N leads to interlinked earnings reports. Specifically, when the level of earnings reported by O is lower, N's reporting strategy is more likely to feature a downward reporting bias. Furthermore, by a comparison of the two-CEO setting with a setting with no CEO turnover, I show that with CEO turnover, (i) the period 2 earnings report is more sensitive to the private information of the CEO in control and less sensitive to the period 1 earnings report; (ii) the period 1 earnings report is more sensitive to the private information of the CEO in control; and (iii) the equilibrium stock price has the same sensitivities towards the associated risks, but is less sensitive to the periods 1 and 2 earnings reports. These results provide a novel explanation for managerial under-reporting bias based on strategic interaction between successive CEOs and shed light on the role of CEO turnover in earnings management behavior and capital market responses.

Strategic Leadership

Author : Sydney Finkelstein
Publisher : Strategic Management
ISBN 13 : 0195162072
Total Pages : 480 pages
Book Rating : 4.1/5 (951 download)

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Book Synopsis Strategic Leadership by : Sydney Finkelstein

Download or read book Strategic Leadership written by Sydney Finkelstein and published by Strategic Management. This book was released on 2009 with total page 480 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book integrates and assesses the vast and rapidly growing literature on strategic leadership, which is the study of top executives and their effects on organizations. The basic premise is that in order to understand why organizations do the things they do, or perform the way they do, we need to deeply comprehend the people at the top-- their experiences, abilities, values, social connections, aspirations, and other human features. The actions--or inactions--of a relatively small number of key people at the apex of an organization can dramatically affect organizational outcomes. The scope of strategic leadership includes individual executives, especially chief executive officers (CEOs), groups of executives (top management teams, or TMTs); and governing bodies (particularly boards of directors). Accordingly, the book addresses an array of topics regarding CEOs (e.g., values, personality, motives, demography, succession, and compensation); TMTs (including composition, processes, and dynamics); and boards of directors (why boards look and behave the way they do, and the consequences of board profiles and behaviors). Strategic Leadership synthesizes what is known about strategic leadership and indicates new research directions. The book is meant primarily for scholars who strive to assess and understand the phenomena of strategic leadership. It offers a considerable foundation on which professionals involved in executive search, compensation, appraisal and staffing, as well as board members who evaluate executive performance and potential, might build their tools and perspectives.

Roles of CEOs and Information in Financial Reports, Contracts, Organizations, and Markets

Author : Chia-Feng Yu
Publisher :
ISBN 13 :
Total Pages : 166 pages
Book Rating : 4.:/5 (11 download)

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Book Synopsis Roles of CEOs and Information in Financial Reports, Contracts, Organizations, and Markets by : Chia-Feng Yu

Download or read book Roles of CEOs and Information in Financial Reports, Contracts, Organizations, and Markets written by Chia-Feng Yu and published by . This book was released on 2013 with total page 166 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies the multiple roles of chief executive officers (CEOs) and financial information, and it consists of four chapters. Chapter 1 reviews selectively the literature on: (i) the determinants and theconsequences of CEO turnover; (ii) the relationship between CEO turnover and earnings management; and (iii) the effects of CEO career concerns and overconfidence on financial reporting. The CEO turnover literature finds robust evidence that CEO turnovers are preceded by poor accounting performance or poor stock market performance. There is also extensive evidence for the relationship between CEO turnover and earnings management and for the effects of CEO overconfidence on financial reporting. However, there is inconclusive evidence regarding market reactions to CEO turnover announcements, post-turnover performance improvements, the relationshipbetween earnings quality and CEO turnover, and the effects of career concerns onfinancial reporting.Chapter 2 addresses the following question. In the wake of recent financialcrises and corporate failures, CEOs are often blamed for their overconfidence leadingto earnings manipulation and excessive risk. How is it then that these overconfidentCEOs obtain job offers in the first place? In an agency model with CEO overconfidence and public regulation, this paper provides conditions under which earnings manipulation and CEO overconfidence can increase the ex ante firm value and the interim market valuation of the firm. Moreover, it is socially optimal for a regulatory body to impose a lenient policy on earnings manipulation rather than a zero-tolerance policy. These results provide an explanation for why earnings manipulation and CEO overconfidence can co-exist even under firm-value-maximizing corporate governance and public regulation. The dark side, however, is that the firm bears greater risk and is more likely to go bankrupt ex post.Chapter 3 examines the effects of market competition on CEO hiring decisionsby firms in a Cournot model where the hired CEOs determine the research anddevelopment investment and production level for their respective firms. The centralresult is that CEO overconfidence and the intensity of market competition (measuredby the number of firms in the industry) have an inverted U-shaped relationship.This suggests that, in equilibrium, firms in an oligopoly hire CEOs with relativelygreater overconfidence than do firms in a duopoly. As the market tends towards beingperfectly competitive, strategic concerns vanish and firms hire realistic CEOs.Chapter 4 explains a `big bath', a phenomenon where a CEO manipulates a company's income statement to make poor results look even worse. In a financial reporting game played by an outgoing CEO, an incoming CEO, and outside investors in the capital market, this study identifies conditions under which a big bath can be sustained as an equilibrium outcome. In particular, when the earnings report issued by the outgoing CEO is sufficiently low, the incoming CEO's reporting strategy will feature a big bath. The paper also generates several predictions relating the likelihood of a big bath, the sensitivity of a CEO's reporting strategy to true earnings and aprior earnings report, and the sensitivity of the stock price to earnings reports.

The Impact of SOX on Earnings Management Activities Around CEO Turnovers

Author : Paul Geertsema
Publisher :
ISBN 13 :
Total Pages : 56 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Impact of SOX on Earnings Management Activities Around CEO Turnovers by : Paul Geertsema

Download or read book The Impact of SOX on Earnings Management Activities Around CEO Turnovers written by Paul Geertsema and published by . This book was released on 2018 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: We assess the impact of the Sarbanes-Oxley Act (SOX) on discretionary accruals (DA) and real earnings management (REM) activities around CEO turnovers. Improved corporate governance post-SOX can either deter earnings management (the deterrence effect) or pressure CEOs to inflate earnings when facing imminent turnover risks (the pressure effect). We find a strong deterrence effect for new CEOs, while the pressure effect dominates the deterrence effect for outgoing CEOs. Pre-SOX firms with new CEOs manage earnings downward through both DA and REM and the effect is more pronounced in weakly governed firms. Post-SOX both types of earnings baths diminished. By contrast, post-SOX firms engage in more aggressive upward earnings management prior to CEO turnovers and the evidence is stronger prior to performance-induced CEO turnovers. The compulsory compliance with the 2003 NYSE and NASDAQ listing rule on audit committee independence is associated with a reduction in new-CEO REM baths.

Earnings Management

Author : Joshua Ronen
Publisher : Springer Science & Business Media
ISBN 13 : 0387257713
Total Pages : 587 pages
Book Rating : 4.3/5 (872 download)

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Book Synopsis Earnings Management by : Joshua Ronen

Download or read book Earnings Management written by Joshua Ronen and published by Springer Science & Business Media. This book was released on 2008-08-06 with total page 587 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a study of earnings management, aimed at scholars and professionals in accounting, finance, economics, and law. The authors address research questions including: Why are earnings so important that firms feel compelled to manipulate them? What set of circumstances will induce earnings management? How will the interaction among management, boards of directors, investors, employees, suppliers, customers and regulators affect earnings management? How to design empirical research addressing earnings management? What are the limitations and strengths of current empirical models?

Investor Protection, CEO Pay and CEO Turnover

Author : Sihong Zhang
Publisher :
ISBN 13 :
Total Pages : 212 pages
Book Rating : 4.:/5 (947 download)

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Book Synopsis Investor Protection, CEO Pay and CEO Turnover by : Sihong Zhang

Download or read book Investor Protection, CEO Pay and CEO Turnover written by Sihong Zhang and published by . This book was released on 2015 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines CEO compensation and turnover in eight countries (including Australia, India, Ireland, Malaysia, Netherlands, New Zealand, South Africa and United Kingdom) from 2000 to 2013 period and focuses on how legal investor protection affects compensation and replacement decisions. I use logistic regressions to investigate the association between investor protection and pay-performance sensitivity, and the association between investor protection and turnover-performance sensitivity. My empirical analysis documents that in firms with stronger investor protection, CEO cash compensation and turnover are more sensitive to accounting performance. And such an effect of investor protection is more pronounced for firms with low level of earnings management. However, the association between investor protection and the CEO pay-performance relationship is weaker after including equity-based compensation.

The Strategic Engagement of Narcissistic CEOs in Earnings Management

Author : Frerich Buchholz
Publisher :
ISBN 13 :
Total Pages : 46 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Strategic Engagement of Narcissistic CEOs in Earnings Management by : Frerich Buchholz

Download or read book The Strategic Engagement of Narcissistic CEOs in Earnings Management written by Frerich Buchholz and published by . This book was released on 2014 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: In corporate governance literature, the focus often lies on ex-post mechanisms like the composition of the board of directors or ownership structure and their impact on restricting earnings manipulation (García-Meca & Sánchez-Ballesta, 2009). In addition to that a recent string of literature takes personality characteristics like striving for reputation or prestige as an ex-ante measure into account to investigate the relationship between management decisions and managerial misbehaviour (Malmendier & Tate, 2009). This study extends the latter line of literature by examining the relationship between chief executive officers' (CEOs) narcissistic behaviour and firms' financial reporting. It is argued that narcissistic persons manipulate accounting choices to enhance a firm's and inherently their particular track record with the intention of achieving self-enhancement (Olsen, Dworkis, & Young, 2013). To measure an individual's personality we build on a set of 15 indicators reflecting narcissistic behaviour of 1,126 CEOs in 671 companies listed in the S&P 500 index for the period of 1992 to 2012. Accrual- and real-operating-based earnings management are proxies for managerial misbehaviour. The results give evidence for an engagement of highly narcissistic CEOs in accrual-based earnings management. Interestingly, CEOs with a high narcissistic personality do not solely strive for increasing earnings by accounting choices. They also lower earnings; especially in the first two years they serve on the board when compared to their less narcissistic peers. Robust to anomalies, which occur in appearance of CEO turnover and succession, we conclude that these CEOs make strategic use of accrual-based earnings in order to polish up the personal track record of their tenure in subsequent years.

Disclosure and CEO Turnover

Author : Ryan K. Peterson
Publisher :
ISBN 13 :
Total Pages : 125 pages
Book Rating : 4.:/5 (872 download)

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Book Synopsis Disclosure and CEO Turnover by : Ryan K. Peterson

Download or read book Disclosure and CEO Turnover written by Ryan K. Peterson and published by . This book was released on 2010 with total page 125 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the influence of firm disclosure on CEO turnover. Two competing theoretical views motivate my inquiry. One view is that an expanded disclosure policy improves firm information environment and hence allows for greater monitoring. Greater monitoring, in turn, constrains managers from undertaking actions that are contrary to shareholder interest. As such, this view anticipates a negative relation between disclosure and CEO turnover. A contrary view is that an expanded disclosure policy limits managerial ability to manipulate performance metrics such as a firm's earnings. Consequently, managers have limited ability to conceal poor firm performance. Greater disclosure is also argued to improve board ability to assess managerial talent. Both these arguments point to a positive association between firm disclosure policy and CEO turnover. In my dissertation, I evaluate the empirical validity of these two competing views. Following prior research, I evaluate disclosure based on firm management earnings guidance policy. In general, I find a positive association between involuntary CEO turnover and disclosure quality. This finding is robust across several tests and supports the view that an expanded disclosure policy limits managerial ability to conceal bad news and improves board ability to assess CEO talent. Overall, my study highlights the influence of disclosure policy on CEO succession.