A number of papers have appeared in recent years which describe empirical investigations of changes in accounting methods.1 Explanations have been offered regarding the motivations for accounting changes, such as the desire to smooth periodic income, to create ad hoc fluctuations in income, to maximize or minimize reported income and so on. In addition to these, Bernstein stated that management often will create reserves for future costs and losses in a period when results are comparatively adverse. He felt that this was especially true in cases of changes in top management.2 Similarly, Forbes quoted a statement from an unnamed CPA that new management has a tendency to be very pessimistic about the values of certain assets with the result that these values are often adjusted.3 These types of behavior are commonly known as "taking a bath." In this paper I report on a study of the income reducing discretionary accounting decisions which were made after a change in management. The objective was to determine whether discretionary accounting changes were