Narcissistic audit committee chairs and the quality of non-IFRS disclosures
Narcissistic audit committee chairs and the quality of non-IFRS disclosures
We examine whether a narcissistic audit committee (AC) chair influences the quality of non-IFRS earnings disclosure. We find that executives are more likely to opportunistically subtract persistent income-decreasing items from IFRS earnings in firms with ACs chaired by highly narcissistic individuals. Interestingly, unlike the common belief that narcissism destroys value, our findings suggest narcissism of an AC chair enhances the quality of non-IFRS earnings. This effect is particularly pronounced when the narcissistic AC chair possesses relevant experience, such as accounting expertise, firm-specific knowledge, or corporate governance experience. Additionally, our results show that the quality of non-IFRS earnings is enhanced when the narcissistic AC chair has fewer personal ties with the CEO and is motivated to assert their authority in monitoring. Importantly, our results are robust when controlling for potential endogeneity.
Audit committee chair, narcissism, personality characteristics, non-IFRS disclosures, non-GAAP., Audit committee chair, Non-GAAP, Narcissism, Non-IFRS disclosures, Personality characteristics
Guan, Jinghan
15b09155-327a-4e62-8b5e-fa8d5942d34c
Zalata, Alaa Mansour
0fc2c56d-97ad-44ce-ab31-63ca335dcef6
Li, Pingli
a7bf0454-129f-46fa-bdf3-5bd940f569c4
Guan, Jinghan
15b09155-327a-4e62-8b5e-fa8d5942d34c
Zalata, Alaa Mansour
0fc2c56d-97ad-44ce-ab31-63ca335dcef6
Li, Pingli
a7bf0454-129f-46fa-bdf3-5bd940f569c4
Guan, Jinghan, Zalata, Alaa Mansour and Li, Pingli
(2025)
Narcissistic audit committee chairs and the quality of non-IFRS disclosures.
British Accounting Review, [101622].
(doi:10.1016/j.bar.2025.101622).
Abstract
We examine whether a narcissistic audit committee (AC) chair influences the quality of non-IFRS earnings disclosure. We find that executives are more likely to opportunistically subtract persistent income-decreasing items from IFRS earnings in firms with ACs chaired by highly narcissistic individuals. Interestingly, unlike the common belief that narcissism destroys value, our findings suggest narcissism of an AC chair enhances the quality of non-IFRS earnings. This effect is particularly pronounced when the narcissistic AC chair possesses relevant experience, such as accounting expertise, firm-specific knowledge, or corporate governance experience. Additionally, our results show that the quality of non-IFRS earnings is enhanced when the narcissistic AC chair has fewer personal ties with the CEO and is motivated to assert their authority in monitoring. Importantly, our results are robust when controlling for potential endogeneity.
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Accepted/In Press date: 4 March 2025
e-pub ahead of print date: 6 March 2025
Keywords:
Audit committee chair, narcissism, personality characteristics, non-IFRS disclosures, non-GAAP., Audit committee chair, Non-GAAP, Narcissism, Non-IFRS disclosures, Personality characteristics
Identifiers
Local EPrints ID: 500321
URI: http://eprints.soton.ac.uk/id/eprint/500321
ISSN: 0890-8389
PURE UUID: 0588f9ec-c2b1-4bae-b6d4-4b28ec40e20d
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Date deposited: 25 Apr 2025 16:31
Last modified: 28 Aug 2025 01:54
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Author:
Jinghan Guan
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