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The Association Between Executive Succession And Discretionary Accounting Changes: Earnings Management Or Different Perspectives?

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  • Randall E. Lasalle
  • Scott K. Jones
  • Rohit Jain

Abstract

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.

Suggested Citation

  • Randall E. Lasalle & Scott K. Jones & Rohit Jain, 1993. "The Association Between Executive Succession And Discretionary Accounting Changes: Earnings Management Or Different Perspectives?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 20(5), pages 653-671, September.
    • Handle: RePEc:bla:jbfnac:v:20:y:1993:i:5:p:653-671
    DOI: 10.1111/j.1468-5957.1993.tb00282.x
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    References listed on IDEAS

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