 Accounting Choices: Variation in Managerial OpportunismFrank Heflin, Sung S. Kwon and John J. Wild Journal of Business Finance & Accounting, 2002, vol. 29, issue 7‐8, 1047-1078 Abstract: This study focuses on variation in managers’ accounting choices given motivations to use accounting accruals opportunistically. Prior research identifies a number of motivations arising from accounting–based contracts that encourage opportunistic reporting by managers. However, prior research implicitly assumes all managers respond identically to the same contractual motivations. This study identifies variation in managers’ responses to contractual motivations involving accruals that is related to managers’ stewardship of corporate assets. Evidence shows that modeling how managers use corporate assets enhances the explanation of their accounting choices given motivations to (a) use accruals opportunistically, and (b) to smooth income via accruals. Managers with high ratings on judicious use of corporate assets are less responsive to motivations to use accruals opportunistically, and to smooth income via accruals, than managers with low ratings. This evidence suggests that not all managers are equally opportunistic, and that modeling this factor helps explain cross–sectional differences in managers’ accounting choices. Date: 2002 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:29:y:2002:i:7-8:p:1047-1078 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker More articles in Journal of Business Finance & Accounting from Wiley Blackwell |
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