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Welcome to the nexus of ethics, psychology, morality, technology, health care, and philosophy

Tuesday, April 27, 2021

Recruiting Dark Personalities for Earnings Management

Harris, L., and others
Available at SSRN


Prior research indicates that managers’ dark personality traits increase their tendency to engage in disruptive and unethical organizational behaviors including accounting earnings management. Other research suggests that the prevalence of dark personalities in management may represent an accidental byproduct of selecting managers with accompanying desirable attributes that fit the stereotype of a “strong leader.” Our paper posits that organizations may hire some managers who have dark personality traits because their willingness to push ethical boundaries aligns with organizational objectives, particularly in the accounting context where ethical considerations are especially important. Using several validation studies and experiments, we find that experienced executives and recruiting professionals favor hiring a candidate with dark personality traits into an accounting management position over an otherwise better-qualified candidate when the hiring organization faces pressure to manage earnings. Our results help to illuminate why individuals with dark personality traits may effectively compete for high-level accounting positions.


This paper provides provocative evidence about the types of individuals who are hired into positions of power and authority in the accounting function of organizations. The results of our studies support our research hypothesis that, in the presence of earnings management pressure, job candidates who possess more dark personality traits (i.e., Candidate A) are more likely to be hired than candidates who possess fewer dark personality traits (i.e., Candidate B).  We also find that executive recruitment professionals are more likely to screen out candidates without dark personalities before they are considered by prospective employers. Our results arise despite the fact that (1) Candidate A is considered to be a significantly worse manager than Candidate B, (2) Candidate A is perceived to be more likely to engage in fraud than Candidate B, (3) Candidate A is perceived to be less likely to maintain high ethical standards in the face of
adversity than Candidate B, and (4) Candidate A is viewed by many as generally less likeable than Candidate B. We therefore conclude that the perceived willingness to push ethical boundaries, as signaled by dark personality traits, represents an important dimension of candidate fit and hiring potential when organizations face pressure to manage earnings.