Cynics say it’s easy to tell when corporate executives are lying: anytime their lips move, said Nathaniel Hindman in Huffingtonpost.com. But now there’s a more precise gauge, courtesy of Stanford accounting professor David Larcker. He and his colleagues analyzed 30,000 conference calls during which executives announced their firms’ earnings. They found a distinct pattern in statements by executives whose companies later had to revise their earnings downward—a potential sign of deceptive accounting.
CEOs who are “less than truthful” tend to distance themselves from their subject matter and push responsibility onto “the team.” They also prefer “effusive adjectives” such as “great” to low-key descriptors like “good.” Fittingly enough, the word “incredible” emerges as one of the deceptive executive’s favorite modifiers.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Create an account with the same email registered to your subscription to unlock access.
-
Ukraine's Olympians: going for gold in the line of fireUnder the Radar Hundreds of the country's athletes have died in battle, while those who remain deal with the psychological toll of war and prospect of Russian competitors
-
'Democrats now have a chance to present a vigorous, compelling case'Instant Opinion Opinion, comment and editorials of the day
-
What has Kamala Harris done as vice president?In Depth It's not uncommon for the second-in-command to struggle to prove themselves in a role largely defined by behind-the-scenes work
-
The news at a glance...Internationalfeature International
-
The bottom line
feature Youthful startup founders; High salaries for anesthesiologists; The myth of too much homework; More mothers stay a home; Audiences are down, but box office revenue rises
-
The week at a glance...Americas
feature Americas
-
The news at a glance...United States
feature United States
-
The news at a glance
feature Comcast defends planned TWC merger; Toyota recalls 6.39 million vehicles; Takeda faces $6 billion in damages; American updates loyalty program; Regulators hike leverage ratio
-
The bottom line
feature The rising cost of graduate degrees; NSA surveillance affects tech profits; A glass ceiling for female chefs?; Bonding to a brand name; Generous Wall Street bonuses
-
The news at a glance
feature GM chief faces Congress; FBI targets high-frequency trading; Yellen confirms continued low rates; BofA settles mortgage claims for $9.3B; Apple and Samsung duke it out
-
The week at a glance...International
feature International