This research’s purpose is to determine the effect of CEO’s & CFO’s tenure period to earnings management behaviour, through discretionary accrual and real activity. CEO will earn good reputation if they can generate higher profits for the company during their tenure, so there are some indications that they will manage their earnings using their discretion in their early years of tenure, and so does CFO. This research uses manufacturing companies listed in Indonesia Stock Exchange for the sample. This research results that both CEO’s and CFO’s early years of tenure affect the earnings management behaviour. We also did some additional analysis to understand the characteristic of the samples that might be strengthen the results. The additional analysis showed that the both CEO & CFO job market competition in Indonesia manufacture industry is very low, so both CEO and CFO might not have external pressure to have good performance that will lead to their reputation in the job market. In the other words, the performance of CEO & CFO in Indonesia didn’t affect by their career concern, but by their reputation to the shareholders internally.

Type of Paper: Empirical

Keywords: CEO Tenure, CFO Tenure, Earningss Management, Monitoring System