<p>Using a sample of 28,126 firm-year observations from Chinese A-share listed companies between 2007 and 2022, we investigate the impact of CFOs’ zodiac year on corporate earnings management. We find that CFOs constrain earnings management during their zodiac year, as CFOs tend to become more risk-averse and cautious due to the superstitious belief that “zodiac year could bring in misfortune”. This constraining effect is primarily achieved by reducing upward accrual-based earnings management, lowering abnormal production costs and increasing operating cash flows. A further analysis based on Daoist culture suggests that the constraining effect is more pronounced in regions where Daoist beliefs are more deeply rooted. Moreover, we analyse the interaction between observable characteristics and implicit psychological traits. We find that older and more powerful CFOs reinforce the constraining effect. Other personal characteristics, such as educational background and overseas experience, also moderate the relationship as they enhance CFOs’ rational cognition and reduce susceptibility to superstitious beliefs. In addition to individual effects of CFO characteristics, we find that the CEOs’ cautious attitudes further strengthen the constraining effect. However, their aggressive managerial style tends to weaken this effect, although the moderating influence is relatively limited. Finally, we suggest that the constraining effect only exists during the zodiac year itself, and auditors recognize this improvement in earnings quality through a higher likelihood of unqualified audit opinions. This study deepens our understanding of how the institutional logic embedded in folk culture influences earnings management and provides theoretical guidance for the innovative integration of traditional beliefs into modern corporate practices.</p>