• Corpus ID: 2808176


  author={Peter Demerjian and Sarah McVay},
We investigate how managerial ability affects the intentional distortion of financial statements (earnings management). On the one hand, better managers receive a compensation premium for their perceived ability, and to the extent that earnings management would tarnish their reputations, we expect them to manage earnings less. On the other hand, better managers may be more able to extract rents through earnings management, for example, by managing earnings to maximize the value of their stock… 

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