CEO Turnover, Earnings Management, and Big Bath

2012 ◽  
Author(s):  
Chia-Feng Yu
Keyword(s):  
Earnings Management ◽  
Ceo Turnover ◽  
Big Bath

scholarly journals Goodwill And Goodwill Write-Downs: Their Effects On Earnings Quality For 2008 And 2009

2011 ◽  
Vol 7 (11) ◽  
Author(s):  
Don E. Giacomino ◽  
Michael D. Akers
Keyword(s):  
Earnings Management ◽  
Earnings Quality ◽  
Pension Plan ◽  
Expected Returns ◽  
Balance Sheets ◽  
Big Bath

This paper examines goodwill on corporate balance sheets.  Specifically, the paper measures the extent to which goodwill exists on corporate balance sheets and the degree of goodwill write-downs that have occurred recently.   We report on our study and a study by Intangible Business, which show that many firms carry substantial amounts of goodwill on their 2008 balance sheets.  Thus, because of the recent downturn in the economy and the markets, the potential for big bath earnings management for 2008 and 2009 exists.   In addition, because of reductions in expected returns on pension plan assets, many firms are likely to record much higher pension expenses.   We expect that the combination of goodwill impairments and increased pension expense will have significant effects on both the amount and the quality of earnings for 2008 and, possibly, 2009.

scholarly journals Earnings Management Surrounding CEO Turnover: Evidence from Korea

Abacus ◽  
2014 ◽  
Vol 50 (1) ◽  
pp. 25-55 ◽  
Author(s):  
Jong-Seo Choi ◽  
Young-Min Kwak ◽  
Chongwoo Choe
Keyword(s):  
Earnings Management ◽  
Ceo Turnover

Big Bath Earnings Management: The Case Of Goodwill Impairment Under SFAS No. 142

2011 ◽  
Vol 20 (2) ◽  
Author(s):  
Charles E. Jordan ◽  
Stanley J. Clark
Keyword(s):  
Earnings Management ◽  
Compelling Evidence ◽  
Font Size ◽  
Goodwill Impairment ◽  
Current Period ◽  
Fortune 100 ◽  
Big Bath

<p class="MsoBodyText2" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-style: normal; mso-bidi-font-style: italic;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">The big bath theory of earnings management suggests that firms experiencing low earnings in a given year may take discretionary write downs to reduce even further the current period&rsquo;s earnings.<span style="mso-spacerun: yes;">&nbsp; </span>The notion is that the company and its management will not be punished proportionately more for the big hit it takes to its already depressed earnings.<span style="mso-spacerun: yes;">&nbsp; </span>This &ldquo;clearing of the decks&rdquo; makes it easier to generate higher profits in later years.<span style="mso-spacerun: yes;">&nbsp; </span>SFAS No. 142, with its new requirement to test goodwill annually for impairment, provided a unique opportunity to test this big bath theory.<span style="mso-spacerun: yes;">&nbsp; </span>Examining Fortune 100 companies, this study presents compelling evidence that the big bath theory is more than just a theory but is instead a practiced method of managing earnings.</span></span></span></p>

scholarly journals MOTIVASI DAN STRATEGI MANAJEMEN LABA PADA ORGANISASI

2019 ◽  
Vol 8 (2) ◽  
pp. 68-80
Author(s):  
Ika Neni Kristanti
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Financial Statements ◽  
Ceo Turnover ◽  
Motivational Factors ◽  
Earning Management ◽  
Political Motivation ◽  
Jones Model ◽  
A Company

Earnings management occurs when managers use valuations in financial reporting and in compiling transactions to change financial statements so as to mislead some stakeholders regarding the underlying results that depend on reported accounting figures or to influence contract outcomes that depend on reported accounting figures. The existence of earnings management in a company is inseparable from the various types or underlying motivational factors, while some of the motivations associated with the implementation of earnings management are bonus motivation, political motivation, tax motivation, CEO turnover motivation, IPO motivation. The models used in measuring earnings management include: Healy Model, DeAngelo Model, Jones Model, Industrial Model, Jones Modification Model, Dechow-Dichev Model, Kothari Model and Stubben Model. Keywords : earning management, motivation, measuring models

scholarly journals Praktik Manajemen Laba dan Reaksi Pasar Setelah Event Pergantian Chief Executive Officer (CEO)

2021 ◽  
Vol 31 (4) ◽  
Author(s):  
Desak Nyoman Sri Juliartini ◽  
Ida Bagus Putra Astika
Keyword(s):  
Earnings Management ◽  
Chief Executive Officer ◽  
Stock Price ◽  
Management Practices ◽  
Market Reaction ◽  
Sampling Technique ◽  
Chief Executive ◽  
Total Sample ◽  
Ceo Turnover ◽  
Analysis Technique

This research is to prove after the change of chief executive officer (CEO) of earnings management practices and market reaction. The total sample taken was using the nonprabability sampling method with a purposive sampling technique of 48 companies on the IDX which included the LQ45 index. The analysis technique used is simple linear regression and paired sample t-test on the DA and PER values of the company. Based on the results of the analysis found that there is no effect of earnings management on market reaction after one and two years of CEO turnover. These results prove that there is no important information on the announcement of CEO turnover, so it is less able to make significant stock price fluctuations. The next result is no difference in both earnings management and market reaction that occurs one and two years after CEO turnover. Keywords: Chief Executive Officer (CEO); Earning Management; Market Reaction; Price Earning Ratio (PER).

CEO Turnover and the Engagement Quality Reviewer’s Audit Effort

2021 ◽  
pp. 0148558X2110549
Author(s):  
Yoo Chan Kim ◽  
Jongkyum Kim ◽  
Inshik Seol
Keyword(s):  
Quality Control ◽  
Earnings Management ◽  
Review Process ◽  
Empirical Investigation ◽  
Financial Statements ◽  
Ceo Turnover ◽  
Detailed Data ◽  
Data Set ◽  
Audit Risk ◽  
Shed Light

Previous literature on the engagement quality (EQ) review argues that EQ reviewers should provide more efforts into the review process when fieldwork auditors’ judgments and conclusions on the financial statements are potentially biased. Little empirical study has been done, however, partly due to the confidentiality of the detailed data on EQ reviewers’ audit hours. The purpose of the article is to shed light on the existing literature by conducting an empirical investigation using a unique actual data set available in Korea. The results show that the EQ review hours are positively associated with CEO turnovers, a proxy for the audit risk, which supports the prediction of the theory on the EQ review. Additional analyses show that such results are stronger under (a) the upward earnings management and (b) the forced CEO turnover. The article extends the existing literature on the EQ review process and enhances the understanding of the engagement-level quality control in the volatile audit environment by providing empirical evidence to the analytic discussions on the EQ review.

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