The role of Chief Executive Officer (CEO) in Corporate Governance and Earnings Management

Year 2015, Volume: 36 Issue: 3, 310 - 322, 13.05.2015

Maryam Mokarami , Zeinab Motefarres İman Abadi Hendijani

Abstract

Abstract. This research was conducted to provide evidence on the effect of CEO change and CEO’s tenure along on earnings management. Hence, a sample composed of 108 companies listed on Tehran Stock Exchange was selected and evaluated during a period of 9 years (2004-2012). To test hypotheses, the approach of combined data was used. In this research, using the modified Jones model, discretionary accruals were estimated. The results indicated that there was a positive and significant relationship between the CEO change and earnings management. They are also indicative of a negative and significant relationship between the CEO’s tenure and earnings management. 

Keywords

Earnings management, corporate governance, CEO change, the modified Jones model

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