Narcissism and Tendency to Earnings Management

Earning management has ever been one of the accounting challenges that many researchers have tried hard to tackle. However, duo to the challenge continuity, it seems necessary to consider more other approaches to resolve it. This study considers earnings management through a behavioral approach and investigates the relation between narcissism, as an individual attribute, and tendency to opportunistic earnings management. The sampling is random and the sample consists of 209 people working in accounting profession. This study is a descriptive research and data is collected through questionnaires. The hypothesis is tested through the regression method. Results show a significant positive relation between narcissism and tendency to opportunistic earnings management. In other words, individuals with higher narcissism behavior have more tendency to manage earnings. These kind of people for their sense of entitlement, power and respectfulness, may take some unethical actions like earnings management. Therefore, in appointment of financial managers and accountants, personal characteristics and attributes should be considered along with professional skills and expertise. Moreover, efficient auditing and management systems in an organization would help modifying their negative attributes.