Narcissism, Audit Market Competition and Audit Quality: Evidence from the Chairpersons of Audit Firms

This study examines the impact of audit firm chairperson narcissism on audit market competition and quality in Turkey from 2013 to 2022. Recent research explores the effects of narcissism in company executives and auditors on firm outcomes. This paper focuses on how audit firm chairperson narcissism influences audit firm competition and audit quality. Chairperson personality traits are analyzed in terms of their influence on strategic decisions, using Upper Echelons Theory. Narcissism is measured through signature size, competition by revenue share and market position, and audit quality by discretionary accruals, reporting aggressiveness, and small profit reporting. Ordinary Least Squares, Logistic regression are mainly performed, then System GMM, and Propensity Score Matching are used to address endogeneity. Results show that narcissistic chairpersons negatively impact both competition and audit quality. This research contributes to understanding the role of chairperson narcissism in audit firms, particularly in emerging markets like Turkey. JEL codes: M40, M41