경영자 임기와 이익조정 - 초기 및 말기 경영자의 단기지향성 -

[Purpose]CEOs may have different motivations for earnings management, depending on which stage of tenure they are in. It is needed to test whether CEOs in their early years show short-term performance maximization to drive trust from the market and the governance structures. At their final stage, they may again lose a long-term perspective to ensure heir job security. [Methodology]We tested how the level of earnings management changes as tenure progresses, especially for their early years and the final year, using Ali and Zhang(2015)’s model. [Findings]The level of accrual earnings management in the early years of CEO tenure was significantly higher than the rest of the tenure. However, test results for the final year was not. We conjecture that CEOs in their early years generally have a motivation to boost their profits, while managers at the end of their tenure act more diversely depending on their given conditions. Second, regarding discretionary expenses, only the early years’ advertising expenses show consistently lower results. There were no significant and consistent test results for R&D or any other discretionary expenses for the last year. Finally, we discovered that the new CEOs using audit services of the big 4 did not rely on accrual-based earnings management while using real earnings management. On the other hand, CEOs with non-big auditors show positive accrual earnings management and no real earnings management. Managers may select real earnings management only after the good monitoring blocks accrual earnings management. [Implications]The test model we employed has an advantage compared to other models whose interest is generally fixed at a certain point in time or event, since to verify the impact of tenure on a person it is necessary to fix the person, not a timing.