Auditor changes and discretionary accruals

Article Abstract:

A study was conducted on a sample of 503 firms that have changed auditors to examine their discretionary accruals and reasons for auditor changes. Results show that discretionary accruals are significantly income increasing during the last year with the former auditor and are insignificant during the first year with the succeeding auditor. Moreover, auditor changes seemed to be motivated by the firms' litigation risk and auditors' preferences for conservative accounting choices.

Financial Personnel, Auditing, Auditors, Financial occupations, Deferred income (Business), Deferred income

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Smoothing income in anticipation of future earnings

Article Abstract:

An analysis of income smoothing practices of employers reveals that sample respondents make discretionary accruals choices in accordance with predictions of future performance relative to current performance. Income smoothing is a practice of employers to decrease or increase employee income in anticipation of poor or better future performance. The results of the study, however, are only suggestive and not conclusive so further study on the field is necessary.

Management Compensation NEC, Research, Management, Accounting and auditing, Executive compensation, Labor relations, Job security, Income accounting, Income maintenance programs

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The effect of competition on CEO turnover

Article Abstract:

The board of directors could successfully identify ineffective CEOs using the relative performance evaluation (RPE) method. The board of directors could further improve RPE's efficiency by encouraging competition. Turnover of CEOs in industries is more prolific and is more closely related to RPE-based accounting methods in highly competitive industries than in industries that have lower competition.

Business Personnel Management, Models, Performance, Evaluation, Human resource management, Appointments, resignations and dismissals, Executives, Chief executive officers, Employee performance appraisals, Performance appraisals

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