CEO Narcissism and Earnings Management

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