Employee turnover likelihood and earnings management : evidence from the inevitable disclosure doctrine

• Main Authors: Gao, Huasheng, Zhang, Huai, Zhang, Jin
• Other Authors: Nanyang Business School
• Format: Article
• Language: English
• Published: 2019
• Subjects: Earnings Management; Business::Accounting; Employee Turnover Likelihood
• Online Access: https://hdl.handle.net/10356/104689; http://hdl.handle.net/10220/50286
• Institution: Nanyang Technological University

We present evidence that managers consider employee turnover likelihood in their accounting choices. Our tests exploit U.S. state courts’ staggered recognition of the inevitable disclosure doctrine (IDD), which reduces employees’ ability to switch employers. We find a significant decrease in upward...