Earnings Management Associated with Types of CEO Turnover in Public Institutions

공공기관의 경영자 교체유형과 이익조정 행태와의 관련성

  • Received : 2016.11.29
  • Accepted : 2016.12.30
  • Published : 2017.01.28


This study examines the influence of CEO(Chief Executive Officer) turnover on earnings management in public institutions. We classified sample into four portfolios based on the joint types of departing CEO(Forced/Voluntary) and incoming CEO(Expert/Nonexpert), and we explore whether earnings management are distinguishable depending on the types of CEO turnover. Empirical findings are summarized as following. The different patterns of earnings management are observed for each portfolio in the turnover year. In particular, when departing CEO leaves the company forcibly and incoming CEO is an expert in that business, there is an evidence of downward earnings management in the turnover year. This means that the incoming CEO takes a bath in his first year by recording big charges to shift blame for failed management on to the predecessor. The results documented in this paper provide an important implication for diverse interest groups participating in the CEO turnover decisions at the present time when normalization of management of public institutions is viewed more important than ever.


Public Institutions;CEO Turnover;Departing CEO;Incoming CEO;Earnings Management


Supported by : 한국연구재단


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