Abstract:

This study examines how press coverage of a Chief Executive Officer (CEO) affects investors' and auditors' perceptions of the reliability of corporate financial information and their expressed behavioral intentions to invest or to modify audit plans. The media's coverage of CEOs has increased exponentially over the last decade and arguably the media's portrayal of the CEO is a factor contributing to investor and auditor decision making. Nonetheless, the empirical accounting research investigating this relationship is relatively sparse. Using an experimental setting, I investigate whether auditors' and investors' perceptions and decisions are affected by the media's portrayal of the CEO. I find evidence that media coverage of the CEO influences auditor and investor perceptions about the reliability of financial information and related behavioral intentions. These findings suggest that media coverage of the CEO influences the overall decision-making behavior of stakeholders.