School of Accountancy Faculty Publications and Presentations
Document Type
Article
Publication Date
12-2-2024
Abstract
Objective: The purpose of this study is to investigate the moderating effect of corporate reputation on the relationship between the Dark Tetrad personality and earnings management.
Method: Two approaches were adopted: one archival and one experimental. In the archival approach, 434 firms (2,645 observations) headquartered in the US were analyzed, covering the period 2010-2017. Earnings management was proxied by accruals quality, reputation was proxied by the score on the ranking of the World’s Most Admired Companies, and Dark Tetrad personality was based on CEO speech and ‘Big Five’ personality analysis. In the experimental approach, we used a 2x2 between-subjects design on a sample of 242 MBA students, most of whom had a background in management. The Dark Tetrad personality was measured with the Short Dark Triad form (Paulhus & Jones, 2014) and the Assessment of Sadistic Personality (Plouffe et al., 2017). For reputation, we adapted the scenarios of Goldberg (1990) and Lafferty (2007). Participants were asked to make five accounting decisions to gauge their disposition to commit fraud.
Results: The results confirmed that CEO personality affects earnings management and showed that a good corporate reputation reduces the likelihood of earnings management and fraud, thereby preserving accounting information quality.
Contributions: Among the practical contributions for auditors and investors, this study expands Upper Echelons Theory by including and associating dark personality traits with greater risk of earnings management and fraud.
Recommended Citation
Góis, A. D. (2024) “Dark Tetrad personality and earnings management: the moderating effect of corporate reputation”, Advances in Scientific and Applied Accounting, 17(2), pp. 209–225/226. https://doi.org/10.14392/asaa.2024170209
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Publication Title
Advances in Scientific and Applied Accounting
DOI
https://doi.org/10.14392/asaa.2024170209
Comments
Copyright (c) 2024 Alan Diógenes Góis, Gerlando Augusto Sampaio Franco de Lima, Márcia Martins Mendes De Luca, Giorgio Gotti. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.