A Study On The Relationship Between CEO Reputation And Earnings Management Of The Listed Companies

With the rapid development of the society and the social media, reputation has drawn lots people's attention. A substantial body of research has been done on company reputation, manager reputation. The performance of company would greatly affect people's evaluation of CEO reputation, and earnings management is very common among listed companies in China. CEO, as the chief executive officer, can decide the disclosure of the accounting information. This study is for the purpose of whether CEO manages earnings in order to maintain his reputation or not.In this study, the author chooses listed companies of mechanism manufacture industry from 2006 to 2008 as the sample, applies Modified Jones Model to evaluate the earnings management of the sample companies. The major proxy for CEO reputation is the number of the news containing the CEO's name, meanwhile CEO age, tenure, salary and other position are also taken into consideration. Then a regression model is conducted for the examination of the relationship between CEO reputation and earnings management.The analysis of the proxies indicates a positive relationship between CEO reputation and tenure, salary, age. CEOs without any other position outside company are more reputed than those with position outside company. The result of regression shows a significant positive relationship between CEO reputation and Earnings Management, which implies there are CEOs manages earnings in order to maintain his reputation in the listed companies of China.