Impact of Managerial Overconfidence on Earnings Management --- The Moderating Roles of Accounting Conservatism

• Main Authors: Hui-Wen Chuang, 莊惠雯
• Other Authors: 許永聲
• Format: Others
• Language: zh-TW
• Published: 2019
• Online Access: http://ndltd.ncl.edu.tw/cgi-bin/gs32/gsweb.cgi/login?o=dnclcdr&s=id=%22107NCHU5385007%22.&searchmode=basic

碩士 === 國立中興大學 === 會計學研究所 === 107 === This study examines the relationship between managerial overconfidence and earnings management, and considers the moderating effect of accounting conservatism. Prior literature show that earnings management may impair the firm value, but also show that psychological bias (overconfidence) of managers cause financial decision bias. Therefore, when overconfident managers want to engage in earnings management, the decision they made may be different from non-overconfident managers made. In addition, accounting conservatism often have supervisory effect on managers’ behavior, but the effect on overconfident managers may also be different from that on non-overconfident managers. The final data includes 6,825 firm-year observations collected from Compustat during 2008-2017. The results show that managerial overconfidence is positively related to real activities-based earnings management, but accrual-based earnings management do not have this finding. The results also show that accounting conservatism have moderating effect on the relationship between managerial overconfidence and earnings management. In companies with high accounting conservatism, overconfident managers will lower the degree of income-increasing earnings management.