CEO Narcissism and Accounting: A Picture of Profits

Posted: 22 Jul 2012 Last revised: 8 Jul 2020

See all articles by Kari Olsen

Kari Olsen

Utah Valley University

Kelsey K. Dworkis

University of Denver

S. Mark Young

University of Southern California - Leventhal School of Accounting

Date Written: September 2, 2013

Abstract

This study investigates the relationship between narcissistic personality characteristics in CEOs of Fortune 500 companies and financial performance measures of earnings-per-share and stock valuation. Using panel data from 1992 through 2009, we show that firms with narcissistic CEOs have higher earnings-per-share and share price than those with non-narcissistic CEOs. We examine the mechanism driving the observed results and find that narcissistic CEOs are more likely to increase reported EPS through real and operational activities rather than accrual-based manipulations. The findings suggest that narcissistic personality characteristics of top executives affect financial performance measures through the executive’s decisions and influence over the firm’s operational activities rather than through accrual and accounting decisions.

Keywords: Narcissism, Personality, Earnings-Per-Share, Earnings Management, Stock Prices

Suggested Citation

Olsen, Kari and Dworkis, Kelsey K. and Young, S. Mark, CEO Narcissism and Accounting: A Picture of Profits (September 2, 2013). Journal of Management Accounting Research, Vol. 26, No. II, 2014. DOI: 10.2308/jmar-50638, Available at SSRN: https://ssrn.com/abstract=2115067 or http://dx.doi.org/10.2139/ssrn.2115067

Kari Olsen

Utah Valley University ( email )

800 West University Parkway
Orem, UT 84058
United States

Kelsey K. Dworkis

University of Denver ( email )

2101 S. University Blvd.
Denver, CO 80208
United States

S. Mark Young (Contact Author)

University of Southern California - Leventhal School of Accounting ( email )

Los Angeles, CA 90089-0441
United States
213-740-4848 (Phone)
213-747-2815 (Fax)

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