Earnings Management Following Duality-Creating Successions: Ethnostatistics, Impression Management and Agency Theory

Academy of Management Journal, Vol. 47, April 2004

Posted: 16 Feb 2005

See all articles by Wallace N. Davidson

Wallace N. Davidson

Southern Illinois University at Carbondale - Department of Finance

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS)

Young Sang Kim

Northern Kentucky University - Haile/US Bank College of Business

Carol Nemec

Southern Oregon University - School of Business

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Abstract

Impression and earnings management were explored via reasoning and methods grounded in ethnostatistics and agency theory. We hypothesized that earnings management occurs more frequently following duality-creating successions than otherwise because CEO-chairs have greater control of the impressions created by their firms' financial reports and are operating under greater expectations of positive results. Using a sample of 173 duality-creating succession announcements and 112 non-duality-creating succession announcements, we obtained empirical results consistent with these predictions.

Keywords: Earnings management, duality, agency theory

JEL Classification: G30, G34

Suggested Citation

Davidson, Wallace N. and Jiraporn, Pornsit and Kim, Young Sang and Nemec, Carol, Earnings Management Following Duality-Creating Successions: Ethnostatistics, Impression Management and Agency Theory. Academy of Management Journal, Vol. 47, April 2004. Available at SSRN: https://ssrn.com/abstract=628341

Wallace N. Davidson

Southern Illinois University at Carbondale - Department of Finance ( email )

Mail Code 4626
Carbondale, IL 62901-4626
United States
618-453-1429 (Phone)
618-453-5626 (Fax)

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS) ( email )

30 E. Swedesford Road
Malvern, PA 19355
United States
(484) 753-3655 (Phone)

HOME PAGE: http://www.personal.psu.edu/pxj11/index1.html

Young Sang Kim (Contact Author)

Northern Kentucky University - Haile/US Bank College of Business ( email )

Dept of Economics and Finance
Highland Heights, KY 41099
United States
859-572-5160 (Phone)
859-572-6627 (Fax)

Carol Nemec

Southern Oregon University - School of Business ( email )

1250 Siskiyou Boulevard
Ashland, OR 97520-5022
United States

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