TY - JOUR
T1 - CFO social ties to non-CEO senior managers and financial restatements
AU - Kuang, Yu Flora
AU - Liu, Xiaotao Kelvin
AU - Paruchuri, Srikanth
AU - Qin, Bo
N1 - Funding Information:
Authors are alphabetically listed. We sincerely thank Juan Manuel García-Lara and two anonymous referees for their most constructive advice. We are grateful to Steven Balsam, Mary Barth, Philip Berger, Joseph Carcello, Eddy Cardinaels, Shuping Chen, Michelle Hoggan, Martien Lubberink, Greg Miller, Don Moser, Mark Peecher, Mathijs van Peteghem, Chris Rider, Jason Shaw, Douglas Skinner, Suraj Srinivasan, T. J. Wong, and Wei Zeng for their helpful comments and suggestions. We also thank conference and seminar participants at the 2016 AFAANZ Conference (Gold Coast), the 2016 EAA Annual Conference (Maastricht), the 2017 Academy of Management Annual Meeting (Atlanta), VU University Amsterdam, University of Amsterdam, University of South Carolina, University of Melbourne, Monash University, Australian National University, Deakin University, and University of Technology Sydney. All remaining errors are our own.
Publisher Copyright:
© 2020 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2022
Y1 - 2022
N2 - 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.
AB - 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.
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U2 - 10.1080/00014788.2020.1793719
DO - 10.1080/00014788.2020.1793719
M3 - Article
AN - SCOPUS:85088834369
SN - 0001-4788
VL - 52
SP - 115
EP - 149
JO - Accounting and Business Research
JF - Accounting and Business Research
IS - 2
ER -