Impact of managers’ sticky expectations on earnings management: The moderator role of non-executive managers

The managers’ sticky expectations is due to opportunistic behaviors. Thus, the purpose of this paper is to explore relationship between managers’ sticky expectations and earning management with regard to non-executive managers. The analysis is based on pooling data and multiple regression from 131 firms in duration 2012-2018. show that there is a significant relationship between the managers’ sticky expectations and earnings management. Also, non-executive managers effect on relationship between managers’ sticky expectations and earnings management. Managers employed the earnings management owing to their expected goals. Based on agency theory, non-executive managers have considered as a controlling and monitoring mechanism. This role can leads to modifying of relationship between managers’ sticky expectations and earnings management.Contribution: This study tries to fill the theoretical gap between board structure and earnings management literature in Iranian companies. In this regard, due to the potential conflicts between managers and other stakeholders, it is expected that the next enhancement of managers’ monitoring role by increasing the number of non-executive managers may moderate the earnings management.