Premium
THE ASSOCIATION BETWEEN EXECUTIVE SUCCESSION AND DISCRETIONARY ACCOUNTING CHANGES: EARNINGS MANAGEMENT OR DIFFERENT PERSPECTIVES?
Author(s) -
Lasalle Randall E.,
Jones Scott K.,
Jain Rohit
Publication year - 1993
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/j.1468-5957.1993.tb00282.x
Subject(s) - accounting , association (psychology) , earnings management , earnings , perception , order (exchange) , business , economics , psychology , finance , psychotherapist , neuroscience
This paper investigates the association of executive changes with both income increasing and decreasing accounting changes. Two potential explanations for the hypothesis that firms with changes in CEOs are more likely to make accounting changes are examined. The earnings management explanation holds that new management intervenes in the financial reporting process in order to alter perceptions of effectiveness. The different perspectives explanation holds that managements have different tastes, perspectives, or views of the world than the predecessor. Evidence supports the different perspectives explanation.