Journal of Management & Governance

, Volume 11, Issue 1, pp 45–60 | Cite as

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

  • Wallace N. DavidsonIII
  • Biao Xie
  • Weihong Xu
  • Yixi Ning


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.


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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  • Wallace N. DavidsonIII
    • 1
  • Biao Xie
    • 2
  • Weihong Xu
    • 3
  • Yixi Ning
    • 4
  1. 1.Finance DepartmentSouthern Illinois UniversityCarbondaleUSA
  2. 2.Finance Department, College of Business AdministrationSouthern Illinois University at CarbondaleCarbondaleUSA
  3. 3.Department of Accounting & LawState University of New York at BuffaloBuffaloUSA
  4. 4.School of Business AdministrationUniversity of Houston – VictoriaSugar LandUSA

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