The impact of CEO narcissism on earnings management

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

Research output: Contribution to journalArticleResearchpeer-review

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.
LanguageEnglish
Pages210-226
Number of pages17
JournalAbacus
Volume54
Issue number2
Early online date5 Aug 2017
DOIs
Publication statusPublished - Jun 2018

Fingerprint

Narcissism
Earnings management
Chief executive officer
Import
Key performance indicators
Accounting choice
Earnings manipulation
Accruals
Earnings announcements
Information release
Unethical behavior
Analysts
Empirical test

Keywords

  • personality
  • earnings management
  • narcissism
  • Earnings announcements
  • Chief executive officer

Cite this

Capalbo, F., Frino, A., Lim, M. Y., Mollica, V., & Palumbo, R. (2018). The impact of CEO narcissism on earnings management. Abacus, 54(2), 210-226. https://doi.org/10.1111/abac.12116
Capalbo, Francesco ; Frino, Alex ; Lim, Ming Ying ; Mollica, Vito ; Palumbo, Riccardo. / The impact of CEO narcissism on earnings management. In: Abacus. 2018 ; Vol. 54, No. 2. pp. 210-226.
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Capalbo, F, Frino, A, Lim, MY, Mollica, V & Palumbo, R 2018, 'The impact of CEO narcissism on earnings management', Abacus, vol. 54, no. 2, pp. 210-226. https://doi.org/10.1111/abac.12116

The impact of CEO narcissism on earnings management. / Capalbo, Francesco; Frino, Alex; Lim, Ming Ying; Mollica, Vito; Palumbo, Riccardo.

In: Abacus, Vol. 54, No. 2, 06.2018, p. 210-226.

Research output: Contribution to journalArticleResearchpeer-review

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