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CFO Narcissism and Financial Reporting Quality

Year: 2017

Type: article

Abstract: ABSTRACT We investigate the effect of CFO narcissism, as measured by signature size, on financial reporting quality. Experimentally, we validate that narcissism predicts misreporting behavior, and that signature size predicts misreporting through its association with narcissism. Empirically, we examine notarized CFO signatures and find CFO narcissism is associated with more earnings management, less timely loss recognition, weaker internal control quality, and a higher probability of restatements. The results are consistent for within‐firm comparisons focusing on CFO changes and are robust to controlling for CFO overconfidence and CEO narcissism. The results highlight the importance of CFO characteristics in the domain of financial reporting decisions.

Source: Journal of Accounting Research

DOI: 10.1111/1475-679x.12176

Authors: CHARLES HAM, MARK LANG, NICHOLAS SEYBERT, SEAN WANG

Institutions: Washington University in St. Louis, University of North Carolina at Chapel Hill, University of Maryland, College Park, Rice University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2767646553

FWCI: 72.64

Cites: 88

Cited by: 435

Related to: 10