Executives with CPA firm career experience and corporate fraud

Xiangqin Qi, Jinwei Fu, Yuan Li and Lixing Xue

Finance Research Letters, 2023, vol. 58, issue PB

Abstract: Corporate fraud undermines investors’ confidence and is harmful to the development of capital market. Using a sample of A-share listed companies in China over the period of 2008–2021, we find that executives with CPA firm career experience can help reduce the likelihood of corporate fraud. We explore the potential economic mechanisms and find that executives with CPA firm career experience can improve the quality of internal control and audit quality. Further analysis shows that the effects of executives with CPA firm career experiences on corporate fraud is more pronounced when firms endure lower agency cost and firms are not controlled by state government. Our findings suggest that executives’ career experience plays an important role in corporate governance.

Keywords: CPA firm career experience; Corporate fraud; Internal control; Audit quality (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007365

DOI: 10.1016/j.frl.2023.104364

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