CEO Origin and Accrual-Based Earnings Management

Y. Kuang, B. Qin, J.L. Wielhouwer

Research output: Contribution to JournalArticleAcademicpeer-review


This study examines the influence of CEO origin on accrual-based earnings management and how these effects evolve over the CEO’s tenure in office. Compared with CEOs promoted from within the company, CEOs recruited from outside have a stronger incentive to demonstrate their abilities in the initial years after their appointment; these outside CEOs also may have a lower expectation of surviving the short run. We predict and find that outside CEOs engage in greater income-increasing manipulation in the early years of their tenure. However, the differences in earnings management practices become insignificant after CEOs survive the short run. Our results are robust to a variety of alternative hypotheses and sensitivity checks. The findings thus show that CEO origin is an important factor for explaining financial reporting strategies; they also add to our understanding of CEO origin, managerial horizon problems, and the determinants of aggressive accounting.
Original languageEnglish
Pages (from-to)605-626
JournalAccounting Horizons
Issue number3
Publication statusPublished - 2014


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