The impact of manager reputation incentive, and manager conservatism on accrual-based earnings management: understanding managers' gender

Purpose This study explores the effects of managerial reputation incentives and conservatism on accrual-based earnings management (AEM) in firms listed on the Tehran Stock Exchange (TSE). Design/methodology/approach This study examined data from 191 firms between 2014 and 2023. Managers' age and signatures are psychological indicators of reputation, motivation, and conservatism, respectively. Findings The results show that managers' reputation incentives (MREP) have a significant positive effect on AEM, while manager conservatism (MCON) has a significant negative effect. The hypotheses were examined specifically for highly constrained firms as part of the robustness testing. Moreover, no reverse causality was found, confirming the assumed theoretical direction. MREP and MCON have a significantly stronger impact on AEM among female executives in large firms. Originality/value MREP and MCON can each serve a dual function in the AEM, illustrating the complex interactions among motivation, ability, and various characteristics. These behavioral traits have received limited empirical attention, particularly in emerging markets. This study addresses the gaps in these relationships and suggests an improved decision-making strategy.