Introduction
Theoretically, earnings management is a technique taken by manager in manipulating accounting transaction in order to achieve some specific objective. This is more likely to occur in few circumstances either the company unable to meet the investor expectation or sometimes also due to several motivation factors. Even though earnings management is often intentionally to misleading information, however it is consider as “allowable but unethical” as long as not lead to fraudulent activity. This concept is said to be unethical because it still against the objectivity and the originality of that standards even complying all the basic requirements.
In this writing provide some discussion of literature review of the CEO changes and earnings management. Generally, according to big bath hypothesis, the CEO is trying to hide current higher earnings in order to secure their position in future drop earnings performance. In other hand, the contemporary CEO claim that he always does not have sufficient time especially on his first year tenure to show his capability, hence take opportunistically behavior by manipulate the account in achieving their target. Also, in few cases, CEO’s compensation also being some motivation factors.

CEO big bath hypothesis
Generally, the likelihood involuntary CEO turnover are positively related to a firm's earnings management. The relation surrounding CEO turnover also occurs either the current performance good or bad. Big Bath in accounting is a technique take by CEO in taken against income by reduce assets, which purposely to lower expenses in the future. Usually, they write-off or reduce the asset from the current year accounting period and results a lower net income for that current year. This purposely to create “big expenses” so that future years can show improvement income.
The CEOs objective to engage in big bath behavior