How Managers’ Traits Affect Perceived Ambiguity of Rules and Decision Making

Summary

This research identifies individual traits of managers that correlate with their perception of ambiguity in accounting standards and explores how these perceptions influence their decision- making, specifically regarding earnings management. The researchers examined traits like narcissism, impulsivity, and abstract thinking to understand how they individually and interactively affect managers' interpretations of accounting rules. Through examining the role of these traits, the researchers shed light on the psychological underpinnings of how managers might exploit ambiguity in accounting standards to their advantage.