Investigating the effect of managers' narcissism and overconfidence on the comparability of financial reports

Subject Areas :

Shahrzad Seraj ¹ (Department of Accounting, Islamic Azad University, South Tehran Branch, Tehran, Iran)
Mohammad Reza Hamzah ² (Master's student of Accounting, South Tehran Branch, Islamic Azad University, Tehran, Iran.)

Received: 2024-02-06 Accepted : 2024-06-15 Published : 2024-07-16

Keywords: Ability to compare financial statements, narcissism, overconfidence of managers,

Abstract :

Purpose: Narcissism is a personality trait in which a person tends to be admired, exaggerate, and magnify himself. Narcissistic managers will be more able to use power and information asymmetry to intervene in false financial reporting. Therefore, based on this argument, the current research aims to investigate the effect of self-obsession and overconfidence of managers on the comparability of financial reports. Methodology: The sample consists of 167 companies listed on the Tehran Stock Exchange from 2012 to 2012. Findings: The results of the research findings show that managers' narcissism affects the comparability of financial statements. Also, excessive confidence of managers affects the comparability of financial reports. Originality: Managers who are narcissistic use their skills in deceit, fraud, and intimidation to maintain their leadership position. In most cases, narcissistic managers are pursuing great achievements within the company. That's why they tend to engage in bold strategic-operational actions and risky business ventures, aiming to demonstrate their best performance to others and ultimately become admired and recognized, thus gaining self-esteem and greatness for themselves; resorting to deceptive activities to achieve this goal.

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