CFO Power and Audit Quality

IF 3.1 3区 管理学 Q2 BUSINESS, FINANCE
Ayoob Alyafai, Ariful Islam MD, Harjinder Singh, Nigar Sultana
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Abstract

Due to their primary responsibilities over the financial reporting process, chief financial officers (CFOs) accumulate critical knowledge, and therefore power, within organisations. We examine whether such powerful CFOs use their influence to increase or decrease audit quality. Using a wide range of proxies for audit quality and a comprehensive measure of CFO power, we find that powerful CFOs are associated with lower levels of audit quality, suggesting that powerful CFOs pursue an agenda of self-interest. Our results are robust to alternative specifications of our variables, including endogeneity. As a result of our findings, we contribute not only to the academic literature but also provide useful research outcomes, such as aiding with legislation to strengthen corporate governance structures within firms to monitor such powerful CFOs.

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来源期刊
Australian Accounting Review
Australian Accounting Review BUSINESS, FINANCE-
CiteScore
6.30
自引率
17.60%
发文量
31
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