Journals Information
Universal Journal of Accounting and Finance Vol. 10(1), pp. 82 - 94
DOI: 10.13189/ujaf.2022.100109
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Do Narcissistic CEOs Affect Accounting Irregularities? Evidence from Indonesia
Engkos Achmad Kuncoro 1, Gatot Soepriyanto 2,*, Arfian Erma Zudana 2
1 Department of Management, BINUS Business School Undergraduate Program, Bina Nusantara University, Jakarta, Indonesia
2 Department of Accounting, Faculty of Economics & Communication, Bina Nusantara University, Jakarta, Indonesia
ABSTRACT
Narcissism is related to the need for recognition. Prior studies show that narcissist behavior may influence the CEO's actions engaged in accounting numbers manipulations. This study examines the effect of CEO narcissism on accounting irregularities in Indonesia. Indonesia provides a unique setting to test this issue because narcissistic behavior is an uncommon trait in the country. Consequently, it may influence the motivation of narcissistic CEO to manipulate accounting numbers. We test the issue by measuring CEO narcissism with the characteristics of CEO's photo on the annual report. We then conduct a simple logistic regression on that proxy to the Beneish M-Score as our accounting irregularities measure. In accordance with our expectations, we find no evidence of an association between CEO narcissism and accounting irregularities. This may attribute to the fact that Indonesia's social and cultural aspects lower the incentives for individuals, including CEOs, to engage in narcissistic behavior, thereby decreasing their motivation to use accounting numbers as a venue to get attention and recognition. Interestingly, this study discovered a significant negative relationship between CEO narcissism and accounting irregularities for firms audited by BIG4 auditors. This may indicate that BIG4 auditors can significantly mitigate the intentions and activities of narcissistic CEOs in manipulating accounting numbers to get better publicity.
KEYWORDS
CEO Narcissism, Accounting Irregularities, Indonesia, Narcissism
Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Engkos Achmad Kuncoro , Gatot Soepriyanto , Arfian Erma Zudana , "Do Narcissistic CEOs Affect Accounting Irregularities? Evidence from Indonesia," Universal Journal of Accounting and Finance, Vol. 10, No. 1, pp. 82 - 94, 2022. DOI: 10.13189/ujaf.2022.100109.
(b). APA Format:
Engkos Achmad Kuncoro , Gatot Soepriyanto , Arfian Erma Zudana (2022). Do Narcissistic CEOs Affect Accounting Irregularities? Evidence from Indonesia. Universal Journal of Accounting and Finance, 10(1), 82 - 94. DOI: 10.13189/ujaf.2022.100109.