Organizational psychological capital and financial reporting quality
University of Wisconsin--Whitewater
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Based on organizational psychological capital theory, this study argues that organizational psychological capital, captured by four unique dimensions (optimism, hope, resilience, and self-efficacy), influence a firm’s financial reporting quality. Prior studies have revealed that organizational psychological capital is positively associated with organizational performance, organizational ethical climate, employees’ job satisfaction and well-being and that these characteristics have been shown to positively influence financial reporting quality. Thus, this study hypothesized and found a positive relationship between organizational psychological capital and the firm’s financial reporting quality. In addition, this paper found that the effect of organizational psychological capital on a firms’ financial reporting quality is more pronounced for firms with weak corporate governance mechanisms, implying that firm-level psychological capital becomes important in certain situations.
Business records -- Management