The impact of CEO narcissism on earnings management

Francesco Capalbo; Alex Frino; Ming Ying Lim; Vito Mollica; Riccardo Palumbo

doi:10.1111/abac.12116

The impact of CEO narcissism on earnings management

Francesco Capalbo, Alex Frino, Ming Ying Lim, Vito Mollica, Riccardo Palumbo

Macquarie Graduate School of Management

Research output: Contribution to journal › Article › peer-review

60 Citations (Scopus)

Abstract

We provide the first empirical test of the relation between CEO narcissism and earnings manipulation. We test the hypothesis that narcissistic leaders over-identify themselves with the organizations they lead and expend considerable effort to achieve their goals, including by engaging in unethical behavior. Earnings announcements are highly anticipated information releases by organizations. They are a key performance indicator used to evaluate the performance of CEOs. This study examines the use of first person singular pronouns by CEOs in response to questions at analyst conferences to measure narcissism. We provide evidence that firms with narcissistic CEOs engage in accruals management to manage earnings positively, highlighting the import effect of CEO personality on accounting choices.

Original language	English
Pages (from-to)	210-226
Number of pages	17
Journal	Abacus
Volume	54
Issue number	2
Early online date	5 Aug 2017
DOIs	https://doi.org/10.1111/abac.12116
Publication status	Published - Jun 2018

Keywords

personality
earnings management
narcissism
Earnings announcements
Chief executive officer

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10.1111/abac.12116

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The impact of CEO narcissism on earnings management

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Keywords

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