Upper echelons’ personality traits and corporate earnings management in Nigeria


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Earnings management offers an opportunity to hide frauds, which are often associated with key officials of corporate entities. Chief Executive Officers (CEOs) and Chief Financial Officers (CFOs) have been implicated in fraudulent earnings management. This study aims to investigate the effect of CFOs’ personality traits on earnings management in non-listed companies facing a debt crisis in Nigeria. The study explores a survey research method involving the administration of copies of a structured questionnaire on CFOs of the sampled companies. Statistical analysis includes computation of means, linear and multiple regression analyses. The findings reveal a high level of upward corporate earnings management and a strong exhibition of narcissistic trait among the CFOs. It was further observed that CFOs’ narcissistic trait is implicated in upward earnings management during the financial crisis. Possible economic implications of these outcomes include misallocation of resources by investors and aggravation of corporate debt crisis. These outcomes have policy implications on the appointment of corporate key officials and the accounting education curriculum. Consequently, the study recommends the personality trait test for individuals to be appointed into upper echelons’ positions in corporate organizations, as well as the inclusion of Element of Psychology in the curriculum of accounting education in Nigeria.

Our sincere gratitude goes to Covenant University, Ota, Ogun State, Nigeria, for sponsoring the publication of this research paper as a contribution to the body of existing knowledge in corporate financial reporting in Nigeria.

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    • Table 1. Descriptive statistics
    • Table 2. Model summary
    • Table 3. Model fitness (ANOVAa)
    • Table 4. Summary of regression coefficients
    • Table A1. Confirmatory factor analysis (upper echelons’ personality traits)
    • Table A2. Confirmatory factor analysis (change of accounting methods)
    • Table A3. Confirmatory factor analysis (real earnings management)
    • Table A4. Sample questionnaire
    • Table A5. List of sampled companies
    • Conceptualization
      Taleatu Taofiki Akinwumi
    • Data curation
      Taleatu Taofiki Akinwumi
    • Formal Analysis
      Taleatu Taofiki Akinwumi
    • Investigation
      Taleatu Taofiki Akinwumi
    • Methodology
      Taleatu Taofiki Akinwumi
    • Writing – original draft
      Taleatu Taofiki Akinwumi
    • Writing – review & editing
      Taleatu Taofiki Akinwumi, Adetula Dorcas Titilayo, Iyoha Francis Odianonsen
    • Software
      Adetula Dorcas Titilayo
    • Supervision
      Adetula Dorcas Titilayo, Iyoha Francis Odianonsen
    • Validation
      Adetula Dorcas Titilayo
    • Funding acquisition
      Iyoha Francis Odianonsen
    • Project administration
      Iyoha Francis Odianonsen