CEO Optimism, Accounting Conservatism and Earnings Management of Listed Manufacturing Firms: Evidence from Asian Emerging Economies

Authors

Rashid Mehmood Division of Management and Administrative Science, UE Business School, University of Education, Lahore, Pakistan
suha alawi Finance Department, Faculty of Economics and Administration, King Abdulaziz University
Ilyas Ahmad Division of Management and Administrative Science, UE Business School, University of Education, Lahore, Pakistan

CEO Optimism, Accounting Conservatism, Earnings Management, Asian Emerging Economies

It is pertinent to understand how CEO optimism and accounting conservatism

influence earnings management to verify the reliability and accuracy of financial

reporting. The motivation behind this research comes from the possible

implications for financial transparency, regulatory oversight, and investor trust

while focusing on the usefulness of corporate governance. The research explores

the influence of CEO optimism and accounting conservatism on earnings

management within Asian emerging economies, analyzing data from listed

manufacturing firms between 2010 and 2022. The study finds a negative

correlation between accounting conservatism and earnings management while

CEO optimism positively correlates with earnings management. These findings

imply that conditional conservatism diminishes the possibility for management

to inflate earnings. However, CEO optimism increases the likelihood of a firm's

earnings management. This research ought to offer a thorough understanding of

accounting conservatism and CEO optimism and the effect that these factors

have on earnings management from the context of Asian emerging economies.