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An investigation of factors influencing the association between top management ownership and earnings management

Hutchinson, Marion R. & Leung, Sidney (2007) An investigation of factors influencing the association between top management ownership and earnings management. Journal of Contemporary Accounting and Economics, 3(2), p. 130.

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Abstract

This study conjectures and shows that the level of stock ownership by top management is non-monotonically associated with managers’ propensity to manage earnings. Increasing ownership from low levels decreases earnings management while ownership at high levels increases earnings management. Further, this study attempts to discern when the effects of management ownership are more salient for the firm. The results of this exploratory analysis of 15,945 firm observations over a six-year period show that the non-monotonic association between top management ownership and earnings management is significant, and hence more important, for the firm characteristics of low growth opportunities, high operating volatility, small size, frequent losses, high-technology, and low institutional ownership.

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ID Code: 13270
Item Type: Journal Article
Additional Information: Access to the author-version is currently restricted pending permission from the publisher. For more information, please refer to the journal's website (see hypertext link) or contact the author.
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Keywords: management ownership, earnings management, discretionary accruals, firm characteristics
ISSN: 1815-5669
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2007 Journal of Contemporary Accounting and Economics
Deposited On: 09 Apr 2008
Last Modified: 29 Feb 2012 23:33

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