CEO Personalities and Financial Misreporting: A Text Analytics Approach

• In Event: Cyber Platforms, Text Analytics and Number Generation Patterns

Abstract

This research examines the relation between CEOs’ personalities and financial misreporting by using a text analytics approach. Specifically, this research applies the evolutionary theory of personality and proposes to test the hypotheses that a CEO’s Big Five personality characteristics (Extroversion, Agreeableness, Conscientiousness, Emotional Stability, and Openness) predict the likelihood of a CEO being named by the SEC as a perpetrator and the likelihood of his firm being subject to an SEC enforcement action. This research also proposes to reconcile the relation between the Big Five personality characteristics and other managerial characteristics (e.g., overconfidence, aggression, risk aversion, etc.) widely studied in accounting and finance literature.

Authors

• Mi Zhou, Virginia Tech University

• Weiguo Fan, Virginia Tech University