An Investigation into the Impact of Managerial Overconfidence, Real Earnings Management, and Enterprise Risk Management on Corporate Social Responsibility

Rezvan Pourmansouri; Dariush  Damoori; Mir Feiz Fallah; Fatemeh  Dekamini; Ramona Birau

doi:10.32479/ijefi.19883

Authors

Rezvan Pourmansouri Department of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran
Dariush Damoori Department of Accounting and Financial, Faculty of Economics, Management and Accounting, Yazd University, Yazd, Iran
Mir Feiz Fallah Department of Financial Management, central Tehran Branch, Islamic Azad University, Tehran
Fatemeh Dekamini Department of Business Management, Mahan Business School, Tehran, Iran
Ramona Birau University of Craiova, "Eugeniu Carada" Doctoral School of Economic Sciences, Craiova, Romania and “Constantin Brâncuși” University of Târgu Jiu, Faculty of Economic Science, Tg-Jiu, Romania

DOI:

https://doi.org/10.32479/ijefi.19883

Keywords:

Managerial Overconfidence, Real Earnings Management, Enterprise Risk Management, Corporate Social Responsibility

Abstract

Corporate social responsibility (CSR) has emerged as a new and sensitive topic in the theoretical literature of accounting research. It is considered a fundamental factor for the survival of companies and has attracted attention from various perspectives of investors, managers, and researchers. Researchers have identified numerous variables as influential factors in CSR. However, this study specifically focuses on examining factors such as Enterprise Risk Management (ERM), Real earnings management (REM), and CEO overconfidence in relation to CSR. This research used data related to 121 companies listed on the Tehran Stock Exchange (TSE) from 2010 to 2022. The results of the hypotheses in this study indicate that when a company lacks an appropriate risk management mechanism (with more unconventional risk management), the level of CSR is lower. Alternatively, managers with higher overconfidence are motivated and inclined to manipulate real earnings. They may endeavor to justify their misuse of company financial resources under the pretext of fulfilling CSR.