The Theory of the Conceptual Metaphor (CMT) is one of the first and most important developments in Cognitive Linguistics (CL). Metaphors We Live By (Lakoff & Johnson 1980) was the first whole book devoted to CL and several important domains of human conceptualisation and language have been studied with the constantly enriched tools of CMT: poetic metaphor and language (Lakoff & Turner 1989; Gibbs 1994), political thinking (Lakoff 1996), mathematics (Lakoff & Núñez 1997), emotions and especially love (Kövecses 1987, 1988, 1990; Barcelona 1992; Martín Morillas & Pérez Rull 1998), linguistic change (Sweetser 1990), gestural language (McNeill 1992) to mention just some especially important works.
Does this sound familiar? You got tired of hearing your doctor and family bug you about losing weight to prevent or manage type 2 diabetes. So, you got a two-week diet plan from a friend. You started gung-ho. The first few days were great. Then you found there were nights you didn’t have time to fix your food and the family dinner. By the weekend your family wanted to have pizza. And the diet went out the door when you left for your favorite pizza place.
Many people try to lose weight, but fewer people lose weight and keep it off. This happens for several reasons. Sometimes people aim to lose too much weight too fast. Or they try to follow a food plan that isn’t how they can eat long term. Reality is that losing weight in a healthy way and learning how to to keep it off for years, is not easy. It takes a new way of thinking. Are you ready?
Earnings management has become a topic of enormous interest to academics, practitioners, regulators, and the financial press in recent years. Executives are often said to face incentives to undertake earnings management on behalf of their firms, either in the form of accruals manipulations or by undertaking real activities in order to try to achieve earnings benchmarks. Most of the extant academic literature links these incentives for earnings management, directly or indirectly, to explicit contracts. By contrast, a recent survey of executives by Graham, Harvey and Rajgopal (2005) documents that more than three quarters of respondents consider upward mobility in the labor market to be more important than short-run compensation benefits in driving earnings management decisions.
This disconnect between the contract-based motivations underlying most prior academic studies and practitioners’ own representations of the considerations driving their behavior leads us to investigate the role of non-contractual career stage incentives over earnings management. We hypothesize and find that younger managers are less opportunistic in both accruals manipulations and in undertaking real activities to achieve earnings management objectives. Our results are robust across alternative empirical proxies for career stage and to controlling for other known factors affecting earnings management, including proxies for direct compensation-based incentives over earnings. Overall, our study provides evidence in support of the notion that non-contractual career stage concerns impact executives’ earnings management behavior.
