In this paper, we investigate earnings management surrounding forced CEO turnover for U.S. property-casualty insurance companies with differing organizational forms. We analyze the three principal organizational form types in the industry—publicly-traded stocks, closely-held stocks, and mutuals. We utilize a unique measure of earnings management, the loss reserve error. Multivariate results show that all ownership types over-state earnings during our sample period whether or not forced turnover occurs. Over-statement is highest for publicly-traded stocks, followed by closely-held stocks and mutuals. Organizational form matters in constraining managerial opportunism in the presence of forced turnovers. Incumbent CEOs of publicly-traded stocks manage earnings upward prior to forced turnovers, consistent with the cover-up hypothesis, but this hypothesis is not consistently supported for mutuals or closely-held stocks. The univariate results support the big-bath hypothesis for closely-held stocks, but the multivariate results do not support the big-bath hypothesis for any organizational form. Finally, corporate governance matters—high board independence and large board sizes are associated with less income over-statement.

中文翻译：

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围绕强制 CEO 更替的盈余管理：来自美国财产保险业的证据

在本文中，我们针对不同组织形式的美国财产保险公司围绕 CEO 强制更替的盈余管理进行了研究。我们分析了行业中三种主要的组织形式类型——公开交易的股票、封闭式股票和互助股。我们利用一种独特的盈余管理措施，即损失准备金误差。多元结果表明，无论是否发生强制更替，在我们的样本期间，所有所有权类型都夸大了收益。公开交易股票的夸大程度最高，其次是非公开股票和共同股。组织形式对于在出现被迫离职的情况下限制管理机会主义很重要。公开交易股票的现任首席执行官在被迫离职之前管理收益向上，这与掩盖假设一致，但这种假设并没有得到共同基金或密切持有的股票的一致支持。单变量结果支持封闭持股股票的大浴场假设，但多元结果不支持任何组织形式的大浴场假设。最后，公司治理很重要——董事会独立性高和董事会规模大与较少的收入高估有关。