CEO tenure and earnings management - A study on Swedish listed companies

Sammanfattning: In this study we investigate the presence of earnings management in connection with CEO successions in Swedish listed companies. We use three accrual-based models to detect earnings management in a sample of companies listed on the Swedish main market in the period 2009-2013. Our results show that CEOs manage earnings in the first two years of service, but we find no corresponding evidence for earnings management in the final year. However, when controlling for earnings management in the early years of CEO service, we find evidence of earnings management in the final year in two of three models. These results are consistent with previous findings in studies on U.S. data, indicating that an omission of this control can lead to a bias against finding evidence of earnings management in the final year of service.