Managerial Overconfidence and Accounting Conservatism

• 成果类型: Article
• 署名作者: Ahmed, Anwer S.; Duellman, Scott
• 署名单位: Texas A&M University System; Texas A&M University College Station; Saint Louis University
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2012.00467.x
• 发表日期: 2013
• 页码: 1-30
• 关键词: asymmetric timeliness; unrealistic optimism; ceo overconfidence; corporate; earnings; dividend

摘要

Overconfident managers overestimate future returns from their firms investments. Thus, we predict that overconfident managers will tend to delay loss recognition and generally use less conservative accounting. Furthermore, we test whether external monitoring helps to mitigate this effect. Using measures of both conditional and unconditional conservatism respectively, we find robust evidence of a negative relation between CEO overconfidence and accounting conservatism. We further find that external monitoring does not appear to mitigate this effect. Our findings add to the growing literature on overconfidence and complement the findings by Schrand and Zechman [2011] that overconfidence affects financial reporting behavior.