How Resilient Are Firms' Financial Reporting Processes to the Sudden Loss of a CFO? Evidence from Sudden Deaths

• 成果类型: Article
• 署名作者: Mcvay, Sarah E.; Rabier, MaryJane R.
• 署名单位: University of Washington; University of Washington Seattle; Washington University (WUSTL)
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826; 1558-7967
• DOI: 10.2308/TAR-2023-0354
• 发表日期: 2025-05
• 页码: 395-419
• 关键词: Chief Financial Officers; financial reporting resilience; financial reporting quality; financial reporting process; filing delays; RESTATEMENTS; duress; executive turnover; internal control quality; rank-and-file employee education; INTERNAL CONTROL; Managerial ability; CURRENT EARNINGS; style; determinants; QUALITY; CEOS; perceptions; succession; expertise

摘要

We examine how resilient firms' financial reporting processes are to the sudden death of a Chief Financial Officer (CFO)-a plausibly exogenous shock that allows us to provide insights on the role of the CFO while abstracting away from the endogenous nature of CFO employment. We find that the likelihood of an adverse reporting event-a delayed SEC filing or ex post restatement-doubles in the year following the event, on average. The financial process is less resilient in more complex firms and more resilient in firms with stronger internal controls and highly educated employees. Sudden CEO deaths, in contrast, have no discernible impact on adverse financial reporting events. Collectively, our study highlights the value of the CFO on the financial reporting process as well as potential financial reporting benefits of CFO contingency plans.