CEO Retirement, Corporate Governance and Conditional Accounting Conservatism

Chen, S; Ni, SX; Zhang, F

CEO Retirement, Corporate Governance and Conditional Accounting Conservatism

Chen, S Ni, SX Zhang, F

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Publisher:: Taylor & Francis (Routledge)
Publication Type:: Journal Article
Citation:: European Accounting Review, 2018, 27, (3), pp. 437-465
Issue Date:: 2018-05-27

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Field	Value	Language
dc.contributor.author	Chen, S
dc.contributor.author	Ni, SX
dc.contributor.author	Zhang, F
dc.date.accessioned	2022-09-10T23:31:13Z
dc.date.available	2022-09-10T23:31:13Z
dc.date.issued	2018-05-27
dc.identifier.citation	European Accounting Review, 2018, 27, (3), pp. 437-465
dc.identifier.issn	1468-4497
dc.identifier.issn	1468-4497
dc.identifier.uri	http://hdl.handle.net/10453/161630
dc.description.abstract	© 2017 European Accounting Association. Based on 16,604 observations between 1994 and 2006, this study revisits the ‘horizon problem’ by examining how CEO retirement affects conditional accounting conservatism. We hypothesize and find that firms become less conservative in their financial reporting before the retirement of their CEOs, and that strong corporate governance mitigates the effect of CEO retirement. The literature concerning the horizon problem has suggested that CEOs manipulate earnings to boost short-term performance before they leave their companies (Dechow, P. M., & Sloan, R. G. (1991). Executive incentives and the horizon problem: An empirical investigation. Journal of Accounting and Economics, 14(1), 51–89; Smith, C. W., & Watts, R. L. (1982). Incentive and tax effects of executive compensation plans. Australian Journal of Management, 7(2), 139–157), but the evidence is mixed. By examining conditional conservatism, we avoid some of the methodological difficulties that confront researchers when examining either real or accrual earnings management. Ours is the first study to provide evidence on how the horizon problem shapes conditional accounting conservatism.
dc.language	en
dc.publisher	Taylor & Francis (Routledge)
dc.relation.ispartof	European Accounting Review
dc.relation.isbasedon	10.1080/09638180.2017.1279065
dc.rights	info:eu-repo/semantics/closedAccess
dc.subject	1501 Accounting, Auditing and Accountability
dc.subject.classification	Accounting
dc.title	CEO Retirement, Corporate Governance and Conditional Accounting Conservatism
dc.type	Journal Article
utslib.citation.volume	27
utslib.for	1501 Accounting, Auditing and Accountability
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access	*
pubs.consider-herdc	false
dc.date.updated	2022-09-10T23:31:12Z
pubs.issue	3
pubs.publication-status	Published
pubs.volume	27
utslib.citation.issue	3

Abstract:

© 2017 European Accounting Association. Based on 16,604 observations between 1994 and 2006, this study revisits the ‘horizon problem’ by examining how CEO retirement affects conditional accounting conservatism. We hypothesize and find that firms become less conservative in their financial reporting before the retirement of their CEOs, and that strong corporate governance mitigates the effect of CEO retirement. The literature concerning the horizon problem has suggested that CEOs manipulate earnings to boost short-term performance before they leave their companies (Dechow, P. M., & Sloan, R. G. (1991). Executive incentives and the horizon problem: An empirical investigation. Journal of Accounting and Economics, 14(1), 51–89; Smith, C. W., & Watts, R. L. (1982). Incentive and tax effects of executive compensation plans. Australian Journal of Management, 7(2), 139–157), but the evidence is mixed. By examining conditional conservatism, we avoid some of the methodological difficulties that confront researchers when examining either real or accrual earnings management. Ours is the first study to provide evidence on how the horizon problem shapes conditional accounting conservatism.

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http://hdl.handle.net/10453/161630