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How to Tell When a CEO Is Lying

In a nifty piece of forensic analysis, two researchers claim to have figured out how to tell when executives are lying. David Larcker and Anastasia Zakolyukina analyzed 30,000 conference calls between 2003 and 2007 to see if certain “tells” during the call were associated with earnings that were later “materially restated.””Deceptive bosses, it transpires, tend to make more references to general knowledge (‘as you know…’), and refer less to shareholder value (perhaps to minimize the risk of a lawsuit, the authors hypothesize),” reports The Economist. “They also use fewer ‘non-extreme positive emotion words.’ That is, instead of describing something as ‘good’, they call it ‘fantastic.’?The aim is to ‘sound more persuasive’ while talking horsefeathers.” (Remind anyone of?Realtors perhaps?)??The liars also used the third person (instead of “I”) and used fewer “hesitation words,” perhaps because they had been coached. [%comments]