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Do Ceo Gratification Preferences Influence Accounting Choices Near Retirement?, Nicholas Wilson
Do Ceo Gratification Preferences Influence Accounting Choices Near Retirement?, Nicholas Wilson
College of Business: Dissertations, Theses, and Student Research
CEOs near retirement are less motivated to act in shareholders' best interests than those planning to remain indefinitely; this is the horizon problem. Financial reporting that personifies the horizon problem includes an abrupt reduction in discretionary spending and an increase in current accounting earnings; this abrupt change in reporting is potentially detrimental to long-term gains. Gratification preference, defined by observable tendencies, is a personal characteristic reflecting one's prior life experiences and environments. This study offers an archival measure of these gratification preferences and examines whether these preferences mitigate or exacerbate the CEO horizon problem. The results suggest that discretionary accounting …