Accounting Irregularities and Executive Turnover in Founder-Managed Firms

• 成果类型: Article
• 署名作者: Leone, Andrew J.; Liu, Michelle
• 署名单位: University of Miami; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr.2010.85.1.287
• 发表日期: 2010
• 页码: 287-314
• 关键词: CEO TURNOVER; OWNERSHIP; RESTATEMENTS; incentives

摘要

This study tests the hypothesis that founder CEOs are less likely to be fired than non-founder CEOs when accounting irregularities are disclosed. We also examine whether CFOs are more likely to shoulder the blame when the CEO is a founder. Using a sample of 96 newly public firms with accounting irregularities, and a control sample of similar newly public firms, we document that the probability of CEO (CFO) turnover in the wake of an accounting irregularity is lower (higher) when the firm's CEO is also a founder. The difference in CEO turnover rates is dramatic, with non-founder CEOs turning over at a rate of 49 percent, as compared to only 29 percent for founder CEOs. Our overall findings are consistent with the notion that the board's response to irregularities differs when the CEO is a founder.