Ex-military CEOs and income smoothing

Long Thai Bui, Huy Viet Hoang and Anh Tuan Nguyen

Accounting Research Journal, 2026, 1-23

Abstract: PurposeThis study aims to examine whether CEOs with prior military service engage in greater accrual-based income smoothing than their nonmilitary counterparts, and whether such smoothing enhances or diminishes the informativeness of current earnings and stock prices in predicting future firm performance.Design/methodology/approachUsing a sample of 34,357 US firm-year observations spanning 1993–2022, the authors identify military CEO status through multiple biographical sources including BoardEx, Capital IQ and Marquis Who’s Who, and measure income smoothing as a composite factor score derived from three established proxies. The results are robust across multiple identification strategies addressing endogeneity concerns, including firm fixed effects, propensity score matching, entropy balancing and instrumental variable analyses.FindingsFirms led by ex-military CEOs engage in significantly greater income smoothing. Importantly, this smoothing enhances the informativeness of both current earnings and current stock prices with respect to future performance, suggesting that military-trained CEOs use smoothing strategically as a signaling mechanism rather than opportunistically.Originality/valueThis study identifies military experience as a novel, psychologically grounded determinant of income smoothing, demonstrating that formative imprinting experiences outside the corporate domain leave enduring marks on executives’ financial reporting practices. The findings contribute to the earnings quality literature by showing that the intent and consequences of smoothing vary systematically with managerial background.

Keywords: Ex-military CEOs; Income smoothing; Earnings informativeness; Imprinting; Accrual-based earnings management; Signaling theory; Upper echelons theory; Corporate governance (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/arj/article/doi/10.1108/AR ... and-income-smoothing (text/html)
https://www.emerald.com/arj/article-pdf/doi/10.110 ... j-04-2026-0389en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:arj-04-2026-0389

DOI: 10.1108/ARJ-04-2026-0389

Access Statistics for this article

Accounting Research Journal is currently edited by Yaowen Shan and DaiFei "Troy" Yao

More articles in Accounting Research Journal from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().