CFO social ties to non-CEO senior managers and financial restatements

Yu Flora Kuang, Xiaotao Kelvin Liu, Srikanth Paruchuri, Bo Qin

Research output: Contribution to journalArticlepeer-review

8 Scopus citations


In this study, we examine how a CFO’s social ties with non-CEO senior managers in the same firm affect the likelihood of financial restatements. We categorise social ties as either professional or personal, and find that the two types of ties have distinct effects. Our findings show that CFOs’ professional ties with senior managers are associated with a lower likelihood of financial restatements. Interestingly, the effects of CFO personal ties are related to a firm’s operational performance, in that such ties are associated with a higher (lower) likelihood of financial restatements when operational performance is poor (good). Overall, our findings are consistent with the notion that CFO social ties with senior managers may give rise to both information sharing and arm-in-arm behaviour.

Original languageEnglish (US)
Pages (from-to)115-149
Number of pages35
JournalAccounting and Business Research
Issue number2
StatePublished - 2022

All Science Journal Classification (ASJC) codes

  • Accounting


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