The article discussed the feasibility from the idiosyncratic risk point of view that CEO enhances the stability of its position by income smoothing. Taking the data of A-share companies listed in Shanghai Stock Exchange and Shenzhen Stock Exchange between 2005 and 2011, the article examined the direct influence of income smoothing upon change of CEO and its indirect influence upon change of CEO by influencing idiosyncratic risks. The article found that the increase of the income smoothing degree would significantly decrease the probability of change of CEO, while the increase of idiosyncratic risks would significantly increase the probability of change of CEO. In addition, the influence of income smoothing upon change of CEO, to a great extent, is realized by influencing idiosyncratic risks. The evidences used in the article show that one of CEO’s major motives to perform income smoothing is to safeguard its position.
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