Corroborating upper echelons theory, this study picks up the notion that narcissistic chief executive officers (CEOs) take advantage of accounting choices to enhance their firms’—and inherently their own—personal track records. Using a set of 15 indicators, reflecting the narcissistic trait of 1126 CEOs for the period 1992 to 2012, we find evidence of highly narcissistic CEOs engaging in accrual-based earnings management (ABEM). In contrast to prior research, the results show evidence not only for income-increasing but also for income-decreasing ABEM. This indicates that highly narcissistic CEOs not only strive to influence stakeholders’ perception of current performance. We conclude that they also assess their potential to influence perception of current and future earnings. The results imply that highly narcissistic CEOs’ accounting choices are driven by self-serving behavior rather than by the intention to provide additional information to the market. When earnings management techniques are used to derive personal advantage from the presentation of a firm’s earnings, the literature refers to this as a case of low earnings quality reflecting unethical behavior. Accordingly, this study contributes to the field of business ethics by showing that CEO narcissism is related to low earnings quality in that it is associated to discretionarily decreasing accruals.

/pdf/the-deliberate-engagement-of-narcissistic-ceos-in-earnings-31uk85rfvu.pdf

The Deliberate Engagement of Narcissistic CEOs in Earnings Management

In this paper, we review scholarly accounting research published within the Asia Pacific Region by analysing nine of the main accounting journals within the region along five dimensions. The nine journals we focus on are: Accounting, Auditing and Accountability Journal; Australian Accounting Review; Abacus; Accounting and Finance; Australian Journal of Management; Accounting Research Journal; Journal of Contemporary Accounting and Economics; Managerial Auditing Journal; and Pacific Accounting Review. The five dimensions we consider are: the most frequently cited papers; topical coverage; impact on practice; research method; and noted authors. Our review leads us to conclude that the accounting journals published within the Asia Pacific region make a significant contribution to research and practice both within the region and internationally.

A review of accounting research in the Asia Pacific region

The study aims to investigate the impact level of earnings quality on firm value. The study has used data with 3,910 observations at listed firms on Vietnam Stock Exchange for the period from 2010 to 2018, and GLS regression analysis is employed in this research. Earnings quality is measured in the aspects of earnings management, earnings persistence, and timeliness of profitability. This study also considers a number of controlled variables that positively influence the firm's value such as firm size, fixed asset investment rate and dividend payout ratio. The results show that earnings quality is positively associated with firm value with having statistical significance. In contrast, some determinants negatively influence firm value such as financial leverage, ratio of market value to book value, and revenue growth. Determinants of firm size, the rate of investment in fixed assets, the rate of dividend payment positively affect the firm value. In contrast, determinants of financial leverage, revenue growth rate and market value to book value ratio are inversely related to firm value according to economic value, Tobin‟s Q or Price. Based on the findings, some recommendations are proposed for investors, management and policy makers as well in the context of emerging countries

https://www.koreascience.or.kr:443/article/JAKO202014862061552.pdf

The impact of earnings quality on firm value: The case of Vietnam

The objective of this paper is to examine the impact of product market competition on earnings quality. Based on a sample from the US manufacturing sector for the period 1996–2005, we find consistent evidence showing a positive relation between product market competition and earnings quality. Additional tests also confirm a positive relation between product market competition and the precision of public and private information held by investors and analysts. We also provide evidence that firms competing in concentrated and heterogeneous industries are associated with a number of earnings attributes and information quality not shared by those competing in concentrated but homogeneous industries. These findings are consistent with the intuition that firms enjoying a monopolistic advantage tend to avoid the attention of their competitors and politicians by creating a more opaque information environment.

/pdf/the-impact-of-product-market-competition-on-earnings-quality-3xvz04aviv.pdf

The impact of product market competition on earnings quality

This manuscript studies the shape of the relation between firm value and trade credit for a sample of Spanish listed firms in the period 2001 to 2007. Considering the trade-off between benefits and costs of investing in trade credit, we estimate a non-linear relationship between accounts receivable and firm value. As expected, the results obtained show a positive relation between firm value and trade credit at low levels of receivables and a negative one at high levels. To give robustness to the results, we analyse whether deviation from target accounts receivable level reduces firm value. Consistent with the previous analysis, we find that deviations from this level of receivables decrease firm value.

/pdf/trade-credit-policy-and-firm-value-1tmsn863dj.pdf

Trade credit policy and firm value

Supporting small firms through recessions and recoveries

In this paper we use agency theory to study the active role of the chief executive in the formulation of corporate strategy. Unlike traditional applications of agency theory, we allow the agent (CEO) to play ar ole in defining the parameters of the agency problem. We argue that CEOs will have an incentive to propose difficult, ambitious and opaque strategies. The effect arises because in equilibrium, the agent may be overcompensated in the sense that the participation constraint is not binding in determining his compensation. The agent can exploit this by proposing ambitious corporate strategies, thereby influencing the parameters of the constraints in the agency problem. The principal (the owners of the company) can mitigate this by precommitting to pay high compensation regardless of the manager’s chosen strategy, but may optimally prefer not to do so. JEL numbers: G30, G34, J33, D82. Keywords: agency theory, executive compensation, free-cashflow theory, strategic complexity

Active agents, passive principals: the role of the chief executive in corporate strategy formulation and implementation ∗

We study the role of leaders in motivating people to follow their initiatives for organisational change. In our model, effective leaders are able to make changes because others will voluntarily agree to follow them. Ineffective leaders are unable to make changes because others will be unwilling to follow and will tacitly resist and block plans for change. We assume followers and leaders share the same objectives for successful change, but leaders have a limited tenure while followers are long lived. This time pressure for the leader can lead to outcomes in which followers are unwilling to follow as they do not believe the leader has ah igh chance of devising a succesful strategy. This creates a lame duck leader, if the leader is entrenched and cannot be removed early. We show thay entrenchment can nevertheless be optimal because it creates better incentives ex ante for both leader and followers. Key words: Leadership, entrenchment, authority. JEL numbers: D23, D72, D73, G30, M50.

/pdf/on-the-optimality-of-entrenched-lame-ducks-an-economic-model-2f42c2z29v.pdf

On the optimality of entrenched lame ducks: an economic model of leadership and organizational change

/pdf/the-phenomenon-of-the-adverse-market-reaction-to-dividend-4u3j8nqkos.pdf

The phenomenon of the adverse market reaction to dividend change announcements: new Eeidence from Europe

We study the role of chief executives in motivating employees to follow their initiatives for strategic change. In our model, leaders can be effective or ineffective. Effective leaders are able to make changes because employees will voluntarily agree to follow them. Ineffective leaders are unable to make changes because employees will be unwilling to follow and will tacitly resist and block plans for change. In our model, employees and leaders share the same objectives for the firm’s success, but employees will be unwilling to follow a leader if they do not believe he is likely to have a high chance of devising a succesful strategy. Since we assume that incompetent leaders are less likely to generate workable strategies, delay in proposing change is viewed as procrastination and lack of strategic vision. This implies that leaders must initiate change within a limited time horizon, or become lame ducks who are merely marking time until their replacement.

/pdf/eff-ective-leadership-and-the-pressure-for-decisive-action-3me1q8wyr7.pdf

Eff ective leadership and the pressure for decisive action

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