To meet short-term earnings targets, firms often engage in real earnings managementpractices (REM) such as reducing advertising expenses and running sales promotions.Since these practices can hinder Chief Marketing Officers (CMOs) in building andmaintaining market-based assets of firms, the authors hypothesize that firms withCMOs will be less likely to engage in REM. Using publicly available secondary data,the authors show that CMO presence decreases a firm’s propensity for REM and thatthe CMO’s ability and willingness to deter REM depend on CEO power and marketpower of the firm, respectively. The authors also conduct a survey of marketingpersonnel to extend the first study by examining marketing expenditures other thanadvertising (e.g., market research) and the firm’s revenue management actions (e.g.,sales promotions). The authors find that CMO presence reduces the propensity forREM by cutting marketing expenditures but has no impact on REM through salespromotions.