Financial executive qualifications, financial executive turnover, and adverse SOX 404 opinions

• 成果类型: Article
• 署名作者: Li, Chan; Sun, Lili; Ettredge, Michael
• 署名单位: University of Kansas; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh; University of North Texas System; University of North Texas Denton
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2010.01.003
• 发表日期: 2010
• 关键词: internal control deficiencies; MANAGEMENT TURNOVER; FIRM-PERFORMANCE; earnings management; ceo turnover; incentives; COMPENSATION; RESTATEMENTS; INFORMATION; governance

摘要

This study attempts to provide a comprehensive understanding of the interrelationships among chief financial officers' (CFOs') professional qualifications, SOX Section 404 internal control weakness, CFOs' turnover, CFOs' qualification improvement, and correction of material weaknesses. We find that firms receiving initial adverse SOX 404 opinions for 2004 have less qualified CFOs. Adverse SOX 404 opinion recipients experience more CFO turnover in 2005, and these firms are more likely to hire CFOs having improved qualifications. Results show that simply hiring a new CFO is not associated with SOX 404 opinion improvement. Opinion improvement requires hiring a better qualified CFO. (C) 2010 Elsevier B.V. All rights reserved.