Investigating the Effect of Excessive Trust on Managing Profits Based on Bankruptcy Model and Bankruptcy in Companies Involved in Tehran Stock Exchange

The present study attempts to investigate the effect of excessive self-esteem management on profit manipulation and bankruptcy in companies admitted to Tehran Stock Exchange during the years 2012-2016. In this research, excessive management trust is measured based on two predicted profit indicators and capital expenditures. The results of statistical tests indicate that over-trust management does not affect bankruptcy of companies, but it affects profit manipulation. In fact, the results show that bankruptcy of companies is independent of the level of self-confidence over management, based on the projected profit criterion and capital expenditures. But, given the positive and meaningful effects of excessive self-confidence on the basis of the predicted profit index and capital expenditure on manipulating corporate profits, this research hypothesis is confirmed.