Journal of Management & Governance

, Volume 11, Issue 1, pp 45–60

The influence of executive age, career horizon and incentives on pre-turnover earnings management


    • Finance DepartmentSouthern Illinois University
  • Biao Xie
    • Finance Department, College of Business AdministrationSouthern Illinois University at Carbondale
  • Weihong Xu
    • Department of Accounting & LawState University of New York at Buffalo
  • Yixi Ning
    • School of Business AdministrationUniversity of Houston – Victoria

DOI: 10.1007/s10997-007-9015-8

Cite this article as:
Davidson, W.N., Xie, B., Xu, W. et al. J Manage Governance (2007) 11: 45. doi:10.1007/s10997-007-9015-8


In this paper we hypothesize that CEOs will be motivated to manage earnings prior to a turnover decision. This motivation comes from the horizon problem for CEOs nearing retirement age and for CEOs whose profit-based bonus is a large portion of their total compensation. We find that firms in which CEOs are nearing retirement age have large discretionary accruals in the year prior to turnover. Although we find firms with a larger proportion of profit-based bonus pay have larger discretionary accruals, this result is not robust with the inclusion of control variables in the regressions.

Copyright information

© Springer Science+Business Media, LLC 2007