CEO Narcissism and Earnings Management

28 Pages Posted: 18 Dec 2014 Last revised: 10 Feb 2015

See all articles by Alex Frino

Alex Frino

Macquarie University

Ming Ying Lim

Macquarie Graduate School of Management; Capital Markets CRC Limited

Vito Mollica

Macquarie Graduate School of Management; Capital Markets CRC Limited (CMCRC); Macquarie University, Macquarie Business School

Riccardo Palumbo

University of Chieti-Pescara; European Capital Markets CRC

Date Written: January 15, 2015

Abstract

This paper investigates the relation between CEO narcissism and a firm’s propensity to adopt earnings manipulation. There is growing evidence that narcissistic leaders over-identify themselves with the organizations they lead and expend considerable resources to achieve their goals, including engagements in unethical behaviour. We provide evidence that firms with more narcissistic CEOs are more likely to positively manage earnings. Our results highlight the importance of CEO personality to firms’ accounting decisions.

Keywords: Chief Executive Officer, Narcissism, Earnings Management, Management Personality

JEL Classification: G34, M41, M51

Suggested Citation

Frino, Alex and Lim, Ming Ying and Lim, Ming Ying and Mollica, Vito and Palumbo, Riccardo, CEO Narcissism and Earnings Management (January 15, 2015). Available at SSRN: https://ssrn.com/abstract=2539555 or http://dx.doi.org/10.2139/ssrn.2539555

Alex Frino

Macquarie University ( email )

North Ryde
Sydney, New South Wales 2109
Australia

Ming Ying Lim (Contact Author)

Macquarie Graduate School of Management

Capital Markets CRC Limited ( email )

GPO Box 970
55 Harrington Street
Sydney, NSW 2001
Australia

Vito Mollica

Macquarie Graduate School of Management ( email )

Capital Markets CRC Limited (CMCRC) ( email )

Level 3, 55 Harrington Street
Sydney, 2000
Australia

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

Riccardo Palumbo

University of Chieti-Pescara ( email )

Via Luigi Polacchi 11
Chieti, Chieti 66100
Italy

HOME PAGE: http://www.unich.it

European Capital Markets CRC ( email )

Via Luigi Polacchi 11
Chieti, Chieti 66100
Italy

HOME PAGE: http://www.ecmcrc.org

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