CEOs With Bling More Likely To Oversee Errors, Fraud, Study Finds

Executive teams led by a CEO who drives expensive cars or owns several houses are more likely to oversee a company where there is fraudulent, or just erroneous reporting, a recent analysis by accounting professors found. Not only was a CEO with “bling” a sign of shoddier corporate reporting, the study also found signs indicating the problems got worse over time if such a CEO remains. Some factors include the CEO’s choice of CFO – more likely to be similarly lavish in lifestyle – and an increase in what the authors call “’traditional’ fraud risk factors,” such as increased equity-based incentives for executives and weak board monitoring.