The Impact of the CEO's Personal Narcissism on Non-GAAP Earnings
| Autor: | Ahmed M. Abdel-Meguid, Mark T. Soliman, Kari Joseph Olsen, Jared N. Jennings |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
Economics and Econometrics
ComputingMilieux_THECOMPUTINGPROFESSION Earnings business.industry media_common.quotation_subject 05 social sciences Flexibility (personality) Accounting 050201 accounting Discretion Order (exchange) 0502 economics and business Narcissism medicine Quality (business) medicine.symptom Big Five personality traits business 050203 business & management Finance media_common |
| Zdroj: | The Accounting Review. 96:1-25 |
| ISSN: | 1558-7967 0001-4826 |
| DOI: | 10.2308/tar-2017-0612 |
| Popis: | Non-GAAP earnings provide managers the flexibility to exclude GAAP items to either produce a more informative performance measure or provide them the ability to opportunistically exclude recurring expenses from non-GAAP earnings. Prior literature examines the use of this form of disclosure at the firm level, although it is ultimately management's decision. We extend prior non-GAAP literature by examining whether the use and quality of non-GAAP earnings is influenced by CEO personality traits, namely, CEO narcissism. We find that narcissistic CEOs are more likely to exclude expenses from non-GAAP earnings and that the magnitude of exclusions is greater. We also find that those non-GAAP exclusions are more persistent and, thus, lower-quality. Our results shed light on the disclosure practice of non-GAAP earnings and show how narcissistic CEOs are more likely to take advantage of the discretion in financial reporting disclosures in order to benefit the firm and themselves. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|