Accounting Discretion, Horizon Problem, and CEO Retirement Benefits

• 成果类型: Article
• 署名作者: Kalyta, Paul
• 署名单位: McGill University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2009.84.5.1553
• 发表日期: 2009
• 页码: 1553-1573
• 关键词: stock option awards; earnings management; nonaudit services; BONUS SCHEMES; COMPENSATION; manipulation; INFORMATION; QUALITY; plans

摘要

Empirical research on the impact of managerial retirement on discretionary accounting choices is inconclusive, with most studies finding no evidence of earnings management in the pre-retirement period. I argue that income-increasing accounting choices in final pre-retirement years are particularly appealing to managers whose pension depends on firm performance in these years. Using primary data on retired CEOs of Fortune 1000 firms, I investigate the impact of CEO pension plans on discretionary accruals. Consistent with the prediction, I find evidence of income-increasing earnings management in the pre-retirement period only when CEO pension is based on firm performance. I also report evidence of negative abnormal market reaction to CEO retirement in firms with performance-contingent CEO pensions.