The Accounting Review Vol. 91 No. 3 2016
The Interaction of Communicating Measurement Uncertainty and the Dark Triad on Managers' Reporting Decisions
Abstract
I conduct an interactive experiment with participants in manager- and investor-like roles to examine whether and how mandating range disclosures for uncertain estimates will influence managers' reporting decisions. I find that managers report less aggressively when ranges are disclosed, such that investors have little aggressive reporting to identify using range disclosures. However, consistent with psychology theory, range disclosures have the greatest effect on managers with stronger levels of psychopathy, narcissism, or Machiavellianism (“the Dark Triad” of personality in psychology). Range disclosures discipline these managers' aggressive reporting, while managers with lower levels of all of these personalities have less aggressiveness to discipline and are insensitive to range disclosure. Consequently, mandating range disclosures should have the greatest effect on managers most in need of reining in—and is unlikely to reveal aggressive reporting to investors (as might be expected) because these managers reduce aggressiveness in anticipation of investor actions.
- DOI
- 10.2308/accr-51276
- Volume
- 91
- Issue
- 3
- Pages
- 973-992
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref