A study on the relationship between CEO's major and earnings management : Focusing on high understanding of the accounting process of managers

This study analyzed how individual managers' characteristics influence corporate decision-making in the financial and economic sectors for CEOs by referring to previous studies such as Bertrand and Schoar (2003). Most of the previous studies in Korea did not report that the acquisition of the CEO's accounting expertise was linked to corporate earnings management. On the other hand, this study defined the characteristics of CEOs (major or MBA) by collecting data from management and accounting majors as a group that is likely to have directly acquired accounting education. Therefore, we investigated how managers' acquisition and experience of accounting education relates to corporate earnings management behavior, and it was found that CEOs and managers with management or accounting training play a role in controlling earnings management. Contrary to the results presented in many previous studies and expectations from universal agency problems, managers who have completed management and accounting majors are not opportunistically involved in earnings management, but instead play a role in controlling earnings management behavior through fostering expertise and ethical consciousness acquired in the course of major completion. Therefore, it seems that management or managers should actively participate in completing management or accounting education based on the results of this study and strengthen the development and participation of companies in management and accounting education programs.