Riding a Tiger without Being Eaten - RePub - Erasmus Universiteit ...

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Regarding the other factors that we proposed would affect perceived CEO behaviour,
we see that the perceived dominance of the CEO has a negative effect on CEO
behaviour before the restatement crisis, and that gatekeeper competence, CEO
competence, and pressure for positive behaviour have a positive effect on perceived
CEO behaviour before the restatement. Perceived dominance also has a significant
negative impact on perceived behaviour during the restatement crisis, while CEO
competence and perceived behaviour before the restatement have a significant
positive impact on perceived behaviour during the restatement crisis.
In sum, most of the other factors that we identified in our hypotheses development
section as likely influencing the perceived behaviour of the CEO did indeed have such
an influence, with a few exceptions. First, there was no significant influence of the
latitude given by gatekeepers regarding earnings management on the perceived
behaviour of the CEO, either before or during the restatement crisis. One explanation
might lie in our measure for this construct, which seemed to contain items with
divergent meanings. However, after deleting the problematic items, the effects of the
construct were still not significant. Perhaps analysts do not see the degree to which
gatekeepers passively leave room for earnings management as relevant, looking only
at active encouragement or discouragement.
Second, the influence of the analysts’ own perceived competence on perceived CEO
behaviour during the restatement crisis was negative, rather than positive. We had
expected that analysts who are more competent would be less susceptible to ‘panic’
during a restatement crisis and would therefore perceive the CEO’s behaviour more
favourably than less-competent analysts. However, this reasoning assumes that
analysts who perceive themselves as more competent are, in fact, more competent.
If this assumption is not justified (which seems conceivable), this could provide an
explanation for our finding. For example, it could be that less-competent analysts
would actually think of themselves as more competent than the analysts who
actually are more competent (Moore, Tetlock, Tanlu & Bazerman, 2006). In that case,
one could expect these analysts to be more susceptible to panic and provide lower
evaluations of the CEO’s behaviour.
Third, effects of perceived pressures by stakeholders for positive CEO behaviour
(both before and during the restatement crisis) on the CEO’s perceived behaviour