Recruiting Dark Personalities for Earnings Management

Ling L. Harris (), Scott B. Jackson (), Joel Owens () and Nicholas Seybert ()
Additional contact information
Ling L. Harris: University of Nebraska-Lincoln
Scott B. Jackson: University of South Carolina
Joel Owens: Portland State University
Nicholas Seybert: University of Maryland

Journal of Business Ethics, 2022, vol. 178, issue 1, No 12, 193-218

Abstract: Abstract Prior research indicates that managers’ dark personality traits increase their tendency to engage in disruptive and unethical organizational behaviors including accounting earnings management. Other research suggests that the prevalence of dark personalities in management may represent an accidental byproduct of selecting managers with accompanying desirable attributes that fit the stereotype of a “strong leader.” Our paper posits that organizations may hire some managers who have dark personality traits because their willingness to push ethical boundaries aligns with organizational objectives, particularly in the accounting context where ethical considerations are especially important. Using several validation studies and experiments, we find that experienced executives and recruiting professionals favor hiring a candidate with dark personality traits into an accounting management position over an otherwise better-qualified candidate when the hiring organization faces pressure to manage earnings. Our results help to illuminate why individuals with dark personality traits may effectively compete for high-level accounting positions.

Keywords: Earnings management; Employee selection; Dark personalities (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10551-021-04761-z

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