The Role of Individual Attributes on Earnings Management Intention Decisions: Emotional Intelligence and Moral Disengagement

• In Event: Emotional Intelligence and Affect

Abstract

There has been a significant amount of research conducted at the firm level investigating the market effect of earnings management. However, there is paucity in the literature on individual attributes of those individuals actually making earnings management decisions. The purpose of this research is to address this gap by examining the influence of two distinct individual attributes, emotional intelligence and moral disengagement, on an individual’s intention to manage earnings. This research utilizes an experimental design to investigate if these specific individual attributes influence earnings management intentions. The results of this investigation revealed that individual attributes do influence earnings management intentions, especially when the proposal is a GAAP violation. Specifically, emotional intelligence was negatively related and moral disengagement was positively related to earnings management intentions in situations that violate GAAP. These results provide an initial step in developing insight into why individuals make certain earnings management decisions.

Author

• Janet Jones, The University of Texas at Arlington