Abstract
We draw on Life History (LH) theory and provide empirical evidence that biological factors shaped by evolution influence the propensity of CEOs to engage in earnings management activities in private firms. Various resource allocation trade-offs shape organisms’ development of different LH strategies on a fast-slow continuum. Fast individuals tend to follow aggressive reproduction strategies. Consequently, they exert more impulsive, opportunistic, and risk-tolerant behavior to achieve their goals. We develop and validate the LH index reflecting CEO LH strategies based on biodemographic data on individuals’ reproduction behavior (number of biological children, number of partners, reproductive timespan, and relationship duration). We find that in situations where earnings management activities can be beneficial, fast CEOs engage in more earnings management activities than slow CEOs.
| Original language | English |
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| Publication date | 2021 |
| Number of pages | 64 |
| Publication status | Published - 2021 |
| Event | 2021 Financial Accounting and Reporting Section Virtual Midyear Meeting - Duration: 21 Jan 2021 → 23 Jan 2021 |
Annual Meeting
| Annual Meeting | 2021 Financial Accounting and Reporting Section Virtual Midyear Meeting |
|---|---|
| Period | 21/01/2021 → 23/01/2021 |