How To Tell CEO Lies?

"People should listen carefully to the telephone conference hosted by CEO and CFO, and record their wording and way of speaking, and they may find clues of their lies," he said.

The two men analyzed the telephone conference records of nearly 3 enterprises in 2003~2007 years, focusing on the links of questions in CEO and CFO, especially in free questioning.

If these records are compared with the company's subsequent performance, it can be very clear that in the face of key information such as net profit and major information errors, which CEO used ambiguous language in the conference call, so as to disguise some disturbing problems hidden in the financial report.

Psychological research shows that people speak differently when they lie.

And CFO lie in the 6 characteristics: 1. It is easy to talk about everything. It refers to the common sense that everyone knows, and often appears phrases like "you know" or "everyone agrees". It tries to separate itself from lies. Second, it often uses extreme and active words to make things sound more convincing. They do not say "good" but "excellent" or "simply incredible". 3. Less mention of the value of shareholders and companies, which may be to avoid lawsuits, because as long as they are dishonest, litigation will eventually come; 4. When lying, they will avoid using the word "I", instead, they will use the third person. The two authors summarized CEO

They seldom use the "mantra" like "HMM." or "Oh", which makes people feel more hesitant.

This also shows that they have "practiced" before lying, and when they are questioned, they are more likely to be irritated or even abused.

For example, Enron Corp's former boss, Geoff Skilling, used to shout at an investor in April 2001's performance press because he questioned his optimism about the company's financial health. Some lying bosses were more likely to swear.

Based on the above findings, the author believes that although financial reporting and Research on past performance of companies are important measures for analysts and investors to evaluate a company, these analysts and investors should also focus on finding more language clues from teleconferencing.