 AIA submission: CEO overconfidence and the incidence of financial restatementTheresa J. Presley and Lawrence J. Abbott Advances in accounting, 2013, vol. 29, issue 1, 74-84 Abstract: The role of the Chief Executive Officer (hereafter, CEO) in financial reporting is almost universally assumed to be significant (Carcello, Neal, Palmrose & Scholz, 2011; Cohen, Krishnamoorthy, & Wright, 2002; Connelly, 2005; Paredes, 2004). While academics and regulators agree that the CEO can have a large impact on financial reporting decisions, there is very little research on how individual CEO characteristics actually influence the financial reporting process. This paper examines the impact of one such CEO characteristic – CEO overconfidence – on the incidence of financial restatement. We utilize a matched-pairs research design consisting of 75 restatement firms (obtained through the GAO restatement sample) and a set of 75 non-restatement control firms. Using an options-based measure of CEO overconfidence developed by Malmendier and Tate (2008), we document a statistically significant positive relation between CEO overconfidence and financial statement restatement. Keywords: Restatement; CEO overconfidence; Rationalization (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:29:y:2013:i:1:p:74-84 DOI: 10.1016/j.adiac.2013.03.007 Access Statistics for this article Advances in accounting is currently edited by Dennis Caplan More articles in Advances in accounting from Elsevier |
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