Abstract
The purpose of this study is to see if Narcissistic CEO behavior patterns lead to earnings management. This study looks at the signs of Narcissistic CEO management practices and how they relate to company performance in 19 Manufacturing Companies listed on the IDX from 2017 to 2019. There are 57 people in the sample. The method of research used in this study was quantitative research with a causal approach. The SPSS test tool for Windows 24.0 is used to test hypotheses by using Path analysis. The findings, CEO narcissism, impact earnings management behavior, but it also impacts company performance through earnings management practices or actions. The CEO is the custodian of data and has the power to make decisions, including policies. The accounting will make every effort to portray good performance through a positive image and profit achievement as expected by investors as an indicator of performance measurement; as a result, CEOs with high self-confidence will use accounting policies to practice earnings management by adding profit figures as needed and the investors' wishes or lowering the profit rate as necessary to achieve the desired results.
Highlights
The purpose of this study is to see if Narcissistic CEO behavior patterns lead to earnings management
This study looks at the signs of Narcissistic CEO management practices and how they relate to company performance in 19 Manufacturing Companies listed on the IDX from 2017 to 2019
The findings show that CEO Narcissism has an impact on firm performance through the practice of earnings management, where CEO Narcissism will influence financial decisions through earnings management practices to assist investors in making business decisions (Lin, Sui, Ma, Wang, & Zeng, 2018; Sanjaya & Rizky, 2018)
Summary
The purpose of this study is to see if Narcissistic CEO behavior patterns lead to earnings management. It is stated that CEOs with Narcissism are more aggressive and confident when making risky decisions (Li & Tang, 2010), such as acquisitions (Chatterjee & Hambrick, 2007), innovations (Gerstner, Konig, Enders, & Hambrick, 2013), or projections by maximizing the value of Resources and Development. This explanation demonstrates that Narcissism's CEO will strive to improve their performance and be publicly recognized to add value to companies such as Earning Per Share. When a narcissistic CEO's operational activities and activities can provide a fire that can burn enthusiasm and innovation, it can be rated positively
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