Individual Moods , Sensation- Seeking , Gambling Intention and Forecasting of Earnings Management Behavior: A Test of Upper Echelons Theory

This paper, based on upper echelons theory, studies earnings management behavior based on the psychological of individuals. This theory emphasizes that the decisions of senior executives of the organization are strongly influenced by their individual characteristics. As a result, the performance of the organization also depends on the individual characteristics, including the psychological characteristics of its managers. Therefore, the purpose of this article is to investigate the psychological characteristics of people's decision making in earnings management. The sample consisted of 259 accounting experts, accounting chiefs and financial managers of listed companies. The research method was survey and the data were collected by questionnaire. Data analysis and hypothesis testing are performed on the basis of structural equations. Evidence from this study shows that negative moods have a significant and positive effect on both types of earnings management behaviors, namely opportunistic and efficient earnings management. But positive moods have only a significant effect on opportunistic earnings management and have no significant effect on efficient earnings management. Also, the findings of this study show that sensation- seeking only has a significant effect on efficient earnings management and not on opportunistic earnings management. Finally, the results of this study confirm that managers with a high Intention to gambling They are more sentiment to earnings management than both an efficient and opportunistic approach.