The Impact of Top Management Team Characteristics on the Choice of Earnings Management Strategies: Evidence from China

2017 ◽  
Vol 32 (1) ◽  
pp. 143-164 ◽  
Author(s):  
Baolei Qi ◽  
Jerry W. Lin ◽  
Gaoliang Tian ◽  
Hua Christine Xin Lewis
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Work Experience ◽  
Management Strategies ◽  
Top Management Team ◽  
Management Team ◽  
Data Availability ◽  
Top Management ◽  
Upper Echelons Theory ◽  
The Impact

SYNOPSIS Using a sample of Chinese A-share listed firms from 2000 to 2015, we investigate the association between a firm's use of earnings management strategies and the characteristics of its top management team. Our findings suggest that several demographic characteristics (i.e., age, gender, educational level, and financial work experience) of the entire team, as well as of the CEO/CFO and other team members separately, are significantly associated with both accrual-based and real-activities-based earnings management; these, in turn, may affect the quality of the firm's financial reporting. Our results are consistent with the predictions of the upper echelons theory and have implications for various stakeholders in corporate financial reporting, as well as providing insights to those responsible for selecting and developing upper-level executives. JEL Classifications: M40; M41. Data Availability: The data used in this paper are derived from public sources.

How does top management team composition matter for continual growth? Reinvestigating Penrose’s growth theory through the lens of upper echelons theory

2019 ◽  
Vol 57 (1) ◽  
pp. 41-70 ◽  
Author(s):  
Wein-Hong Chen ◽  
Min-Ping Kang ◽  
Bella Butler
Keyword(s):  
Top Management Team ◽  
Management Team ◽  
Asia Pacific ◽  
Growth Theory ◽  
Top Management ◽  
Upper Echelons ◽  
Content Type ◽  
Upper Echelons Theory ◽  
Penrose Effect ◽  
The Impact

Purpose Penrose’s argument regarding the managerial constraint on continual expansion over two consecutive periods is termed the “Penrose effect,” a relatively less investigated premise in Penrose’s growth theory. The purpose of this paper is to empirically re-examine the Penrose effect from the perspective of upper echelons theory and investigated how top management team (TMT) composition influences the continual growth of a firm. Design/methodology/approach This study empirically tested the hypotheses based on a sample of listed manufacturing firms operating in Taiwan, a newly industrialized economy in the Asia–Pacific region. Moderated hierarchical regression analyses were applied to test hypotheses. Findings The empirical results suggest that low TMT diversity (in terms of educational, functional and team tenure diversity) is likely to engender a situation in which the Penrose effect might occur. Additionally, the results indicate that the proportion of functional executives plays a significant role in influencing the growth trend over two consecutive periods and may soften the impact of the Penrose effect. Practical implications This paper suggests that appropriate structuring of TMTs and appropriate management of their members’ backgrounds and team tenure diversity can help firms overcome the Penrose effect and grow continually. Furthermore, the proportion of functional executives in a TMT is influential. Originality/value This paper uniquely contributes to the theoretical and empirical development of Penrose’s growth theory, upper echelons theory and resource-based view concerning managerial resources.

Top Management Team Characteristics and Financial Reporting Quality

2019 ◽  
Vol 94 (5) ◽  
pp. 349-375 ◽  
Author(s):  
Dana Zhang
Keyword(s):  
Financial Reporting ◽  
Top Management Team ◽  
Reporting Quality ◽  
Economic Incentives ◽  
Individual Characteristics ◽  
Management Team ◽  
Financial Reporting Quality ◽  
Top Management ◽  
Team Characteristics ◽  
The Impact

ABSTRACT The accounting literature often views managers as individuals whose financial reporting decisions are determined by their economic incentives and individual characteristics. However, managers typically work in a team and most decisions have at least some input from other members of the team. This study examines the impacts of two top management team (TMT) characteristics on financial reporting quality. The results indicate that background homogeneity and long-shared working experience are each distinctly related to a higher likelihood of restatements. Additional tests document that team homogeneity and shared experience also are positively associated with discretionary accruals for firms with income-increasing earnings management incentives. Moreover, the impact of TMTs on financial reporting quality varies with the proportion and tenure of independent directors. These findings indicate that top management team characteristics are important determinants of financial reporting quality. JEL Classifications: G34; M14; M41; M54.

The Impact of Top Management Team Demography on Firm Performance in China

2005 ◽  
Vol 4 (3) ◽  
pp. 227-250 ◽  
Author(s):  
Li-Qun Wei ◽  
Chung-Ming Lau ◽  
Michael N Young ◽  
Zhihui Wang
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
The Impact

scholarly journals PENGARUH KARAKTERISTIK TIM MANAJEMEN PUNCAK TERHADAP MANAJEMEN LABA DENGAN KUALITAS AUDIT SEBAGAI VARIABEL PEMODERASI

2020 ◽  
Vol 3 (2) ◽  
pp. 133-152
Author(s):  
Achmad Zwageri
Keyword(s):  
Regression Analysis ◽  
Earnings Management ◽  
Hypothesis Testing ◽  
Research Method ◽  
Audit Quality ◽  
Top Management Team ◽  
Negative Influence ◽  
Management Team ◽  
Top Management ◽  
Analysis Model

The purpose of this study is to analyze; the influence of the characteristics of the top management team on earnings management with audit quality as a moderating variable. The research sample was selected using a purposive method. The research method used is hypothesis testing, and the analysis model of this study uses a moderation regression analysis (MRA). The results showed that the characteristics of top management namely knowledge and tenure had a negative influence on earnings management, and on audit quality as a moderating factor not proven to strengthen its influence on earnings management.

Top Management Team Intrapersonal Functional Diversity and Tax Avoidance

2020 ◽  
Author(s):  
James M. Plecnik ◽  
Shan Wang
Keyword(s):  
High Risk ◽  
Functional Diversity ◽  
Work Experience ◽  
Top Management Team ◽  
Tax Avoidance ◽  
Management Team ◽  
Top Management ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
Prior Literature

Top management team (TMT) members have been shown to influence tax avoidance; however, prior literature has not identified whether the intrapersonal diversity of TMT functional backgrounds leads to higher levels of tax avoidance. To study this relationship, we utilize TMT intrapersonal functional diversity, which captures the average heterogeneity of the TMT members' work experience. The skills associated with intrapersonal functional diversity may allow managers to better understand and communicate with various parties related to firm tax policies, thereby facilitating tax avoidance. Overall, we find that TMTs with higher levels of intrapersonal functional diversity achieve lower cash effective tax rates and that these TMTs do not rely on tax strategies that pose high risk.

Do Interaction and Education Moderate Top Management Team Age Heterogeneity and Corporate Social Responsibility?

2018 ◽  
Vol 46 (12) ◽  
pp. 2063-2079 ◽  
Author(s):  
Yawei Liu ◽  
M. Awais Gulzar ◽  
Zhaoguo Zhang ◽  
Qingxiang Yang
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
Listed Firms ◽  
Upper Echelons Theory ◽  
Csr Strategy ◽  
Corporate Social ◽  
The Relationship

Using Chinese listed firms' data from 2008 to 2012, we explored, on the basis of upper echelons theory, whether and how top management team (TMT) age heterogeneity affects corporate social responsibility (CSR) and if TMT interaction and TMT education moderate this relationship. Results revealed an inverted U-shaped relationship between TMT age heterogeneity and CSR, in which TMT interaction played a moderating role; however, TMT education did not moderate the relationship. These results are helpful and significant for the understanding of CSR strategy, and for the improvement of human resource management.

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