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Does the CEO manipulate earnings prior to routine departure? – An empirical study about earnings management prior to routine CEO departure on Swedish firms listed on NASDAQ OMX Stockholm

Colevska, Biljana LU and Lindgren, Ida (2015) FEKN90 20151
Department of Business Administration
Abstract
Title: Does the CEO manipulate earnings prior to routine departure? – An empirical study about earnings management prior to routine CEO departure on Swedish firms listed on NASDAQ OMX Stockholm

Seminar Date: 2015-05-25

Course: FEKN90: Degree project, Master of Science in Business and Economics (30 University credit points)

Authors: Biljana Colevska and Ida Lindgren

Advisor: Per Magnus Andersson

Key words: Routine CEO departure, earnings management, discretionary accruals, research and development expenditures, Swedish public market

Purpose: The aim of the study is to empirically describe and analyze whether and if so why CEOs on Swedish public firms, listed on NASDAQ OMX Stockholm, use earnings management prior to... (More)
Title: Does the CEO manipulate earnings prior to routine departure? – An empirical study about earnings management prior to routine CEO departure on Swedish firms listed on NASDAQ OMX Stockholm

Seminar Date: 2015-05-25

Course: FEKN90: Degree project, Master of Science in Business and Economics (30 University credit points)

Authors: Biljana Colevska and Ida Lindgren

Advisor: Per Magnus Andersson

Key words: Routine CEO departure, earnings management, discretionary accruals, research and development expenditures, Swedish public market

Purpose: The aim of the study is to empirically describe and analyze whether and if so why CEOs on Swedish public firms, listed on NASDAQ OMX Stockholm, use earnings management prior to routine CEO departures.

Theoretical perspective: This study is based on prior research that examines the relationship between routine CEO departures and the use of earnings management and literature on earnings management. Furthermore, the theories used in this thesis are based on the agency theory, the stakeholder and shareholder theory, compensation, corporate governance and ownership structure.

Methodology: A quantitative study is made with a deductive approach by running a cross sectional regression to measure the use of discretionary accruals and a panel data regression on the explanatory variables. Furthermore, a panel data regression is used to measure the use of research and development expenses prior to a routine CEO departure.
Empirical foundations: The analysis includes companies listed on NASDAQ OMX Stockholm with a routine CEO departure between the period 2007 to 2014.

Conclusion: Real earnings management occurs prior to routine CEO departures, while there tends to be less use of accruals management. A negative significant relationship is found between board independence, institutional ownership, market capitalization and earnings management. A positive significant relationship is found between the market book ratio and earnings management. (Less)
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author
Colevska, Biljana LU and Lindgren, Ida
supervisor
organization
course
FEKN90 20151
year
type
H1 - Master's Degree (One Year)
subject
keywords
Routine CEO departure, earnings management, discretionary accruals, research and development expenditures, Swedish public market
language
English
id
5470786
date added to LUP
2015-06-10 15:50:06
date last changed
2015-06-10 15:50:06
@misc{5470786,
  abstract     = {Title:		Does the CEO manipulate earnings prior to routine departure? – An empirical study about earnings management prior to routine CEO departure on Swedish firms listed on NASDAQ OMX Stockholm

Seminar Date:	2015-05-25

Course:	FEKN90: Degree project, Master of Science in Business and Economics (30 University credit points)

Authors:	Biljana Colevska and Ida Lindgren

Advisor:	Per Magnus Andersson

Key words:	Routine CEO departure, earnings management, discretionary accruals, research and development expenditures, Swedish public market

Purpose:	The aim of the study is to empirically describe and analyze whether and if so why CEOs on Swedish public firms, listed on NASDAQ OMX Stockholm, use earnings management prior to routine CEO departures.

Theoretical perspective:	This study is based on prior research that examines the relationship between routine CEO departures and the use of earnings management and literature on earnings management. Furthermore, the theories used in this thesis are based on the agency theory, the stakeholder and shareholder theory, compensation, corporate governance and ownership structure.

Methodology:	A quantitative study is made with a deductive approach by running a cross sectional regression to measure the use of discretionary accruals and a panel data regression on the explanatory variables. Furthermore, a panel data regression is used to measure the use of research and development expenses prior to a routine CEO departure.
Empirical foundations:	The analysis includes companies listed on NASDAQ OMX Stockholm with a routine CEO departure between the period 2007 to 2014. 

Conclusion:	Real earnings management occurs prior to routine CEO departures, while there tends to be less use of accruals management. A negative significant relationship is found between board independence, institutional ownership, market capitalization and earnings management. A positive significant relationship is found between the market book ratio and earnings management.},
  author       = {Colevska, Biljana and Lindgren, Ida},
  keyword      = {Routine CEO departure,earnings management,discretionary accruals,research and development expenditures,Swedish public market},
  language     = {eng},
  note         = {Student Paper},
  title        = {Does the CEO manipulate earnings prior to routine departure? – An empirical study about earnings management prior to routine CEO departure on Swedish firms listed on NASDAQ OMX Stockholm},
  year         = {2015},
}