The Role of Managerial Ability in Classification Shifting Using Discontinued Operations

Skousen, C., Sun, L., & Wu, K. (2019). The role of managerial ability in classification shifting using discontinued operations. In Advances in Management Accounting (pp. 113-131).

29 Pages Posted: 12 Sep 2019

See all articles by Christopher J. Skousen

Christopher J. Skousen

Utah State University - School of Accountancy

Li Sun

University of Tulsa

Kean Wu

Rochester Institute of Technology (RIT) - Saunders College of Business

Date Written: January 10, 2018

Abstract

Prior research suggests that managers engage in classification shifting using discontinued operations. We investigate the role of managerial ability in this type of classification shifting because prior research links managerial ability to reduced opportunistic behavior. Using a large sample from 1988 to 2014, we find that more-able managers better mitigate the extent of classification shifting using discontinued operations. We also find that our results are mainly driven by income-decreasing discontinued operations.

Keywords: classification shifting; discontinued operations; managerial ability

JEL Classification: M40, M49

Suggested Citation

Skousen, Christopher J. and Sun, Li and Wu, Kean, The Role of Managerial Ability in Classification Shifting Using Discontinued Operations (January 10, 2018). Skousen, C., Sun, L., & Wu, K. (2019). The role of managerial ability in classification shifting using discontinued operations. In Advances in Management Accounting (pp. 113-131). , Available at SSRN: https://ssrn.com/abstract=3448120

Christopher J. Skousen

Utah State University - School of Accountancy ( email )

College of Business
Logan, UT 84322-3540
United States

Li Sun (Contact Author)

University of Tulsa ( email )

600 South College
Tulsa, OK 74104
United States

Kean Wu

Rochester Institute of Technology (RIT) - Saunders College of Business ( email )

Saunders College of Business
105 Lomb Memorial Drive
Rochester, NY 14623-5608
United States

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