Big Signatures Signal Trouble

The size of a CFO’s signature could indicate his or her level of dishonesty.
Big Signatures Signal Trouble
WHEN IT'S TIME TO EVALUATE a company’s trustworthiness, check out the size of the signature on its financial statements. A working paper suggests that chief financial officers whose signatures on notarized documents are large are more willing to bend the rules.

The authors include Charles Ham of the Olin School of Business at Washington University in St. Louis, Missouri; Mark Lang and Sean Wang of the Kenan-Flagler Business School at the University of North Carolina in Chapel Hill; and Nicholas Seybert of the Smith School of Business at the University of Maryland in College Park.

The group examined the size of 500 CFO signatures on notarized documents filed with the Securities and Exchange Commission, by drawing a rectangle around the extreme points of each autograph and measuring the area per letter. They controlled for factors such as gender, tenure, and corporate history.

They found that the size of the signature, which indicates the signatory's level of narcissism, predicts the likelihood that firms will inflate their earnings and relax internal controls.

Some might think that a certain level of narcissism is an advantage for C-suite executives because of its connection to self-confidence, says Ham. He points to Steve Jobs as a popular example of a reportedly narcissistic—and revered—CEO. However, Ham says that the researchers found that signature size was related “only to the dark elements of narcissism.”

“CFO Narcissism and Financial Reporting Quality” is available at A podcast and additional audio about the research is available at