Chief Executive Officer Turnover and Accounting: a Strategic Repositioning Perspective

C. Morrill and J. Waterhouse

Working Papers from Laval - Faculte des sciences de administration

Abstract: This paper presents evidence on the association between chief executive officer (CEO) turnover and discretionary accounting choice. The findings suggest at least two important ways in which routine and nonroutine CEO turn overs might have different effects on financial statment numbers. Nonroutine turnover CEOs in particular do seem to make income decreasing decisions shortly after coming to power. The other important difference between routine and nonroutine CEO turnover relates to R&D spendings. These results support the argument that accounting earnings are used to signal that a strategic repositioning of the firm has occurred following a changein CEO.

Keywords: MANAGEMENT; ACCOUNTING (search for similar items in EconPapers)
JEL-codes: M40 M41 (search for similar items in EconPapers)
Pages: 32 pages
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:fth:lavadm:96-48

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