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Executive compensation and contract-driven earnings management

journal contribution
posted on 19.11.2019, 00:00 by Lan SunLan Sun
Earnings management is found to be driven by different managerial incentives. Previous studies have identified that executive compensation contracts create incentives for earnings management. The agency theory and the positive accounting theory provide explanations for contract-driven earnings management. This study links the agency theory and the positive accounting theory and reviews the early executive compensation studies, bonus plan maximization hypothesis and equity-based compensation. The aim of this study is to shed light in explaining contractual incentives and provide useful information in understanding the executive compensation contract-driven earnings management behaviour.

History

Volume

8

Issue

2

Start Page

111

End Page

127

Number of Pages

18

ISSN

1823-4992

Publisher

Universiti Sains Malaysia

Peer Reviewed

Yes

Open Access

Yes

Era Eligible

Yes

Journal

Asian Academy of Management Journal of Accounting and Finance