This paper examines the incentives of CEOs in not-for-profit institutions to engage in earnings management. We predict and find that, with one exception, this different setting induces CEOs to engage in patterns of earnings management that are similar to those of their for-profit counterparts....

We hypothesize that, unlike for-profit firms, nonprofit hospitals have incentives to manage earnings to a range just above zero. We consider two ways managers can achieve this. They can adjust discretionary spending [Hoerger, T.J., 1991. Profit variability in for-profit and not-for-profit...