DOES CHIEF AUDIT EXECUTIVE TENURE AFFECT CEO OVERCONFIDENCE IN REAL EARNINGS MANAGEMENT?

CEO overconfidence tends to make high-risk decisions, including engaging in real earnings management (REM); however, the role of Chief Audit Executive (CAE) tenure as a governance mechanism that may moderate this relationship remains underexplored. This study aims at examining the effect of CEO overconfidence on REM and the moderating role of CAE tenure in this relationship. The sample consists of manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2012–2019 period and was analyzed using a fixed-effects panel data regression model. The results showed that CEO overconfidence has a positive effect on REM, and longer CAE tenure effectively reduces REM practices. However, CAE tenure did not moderate the relationship between CEO overconfidence and REM. This study contributed by emphasizing the importance of considering CEO personality traits and CAE tenure length in formulating effective corporate governance policies.