CFOs With Audit Firm Working Experience and Corporate Risk‐Taking

Yue Luo, Zilong Song, Yumiao Yu and Xiaohui Zhao

Accounting and Finance, 2025, vol. 65, issue 4, 3247-3269

Abstract: Using data from Chinese A‐share listed companies, we examine how CFO audit firm experience influences corporate risk‐taking. Our findings show that companies with CFOs who have audit firm experience exhibit significantly lower risk‐taking levels. However, this effect weakens if the CFO has a lower shareholding ratio, prior experience in non‐Big Four audit firms, or shorter audit firm tenure. Mechanism tests reveal that CFOs with audit firm experience reduce risk‐taking by curbing capital expenditures, external financing, and R&D spending. This study highlights the critical role of CFOs' professional backgrounds in shaping corporate governance and risk management strategies.

Date: 2025
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