Board influence on the selection of external accounting executives

Nikos Vafeas and Adamos Vlittis

The British Accounting Review, 2015, vol. 47, issue 1, 46-65

Abstract: We hypothesize that boards of directors systematically influence the selection of external candidates to the top accounting executive position. This inquiry is motivated by prior evidence that boards influence the selection of external candidates to the CEO position, and by evidence that boards influence financial reporting outcomes. Analyzing a comprehensive sample of top accounting executive appointments from the United States we identify links between board attributes and the likelihood of an external accounting executive appointment. We also find that external appointments are more likely to be associated with forced compared to voluntary turnover. The importance of accounting executive turnover is reinforced by analysis of changes in discretionary current accruals. Together, the results are broadly consistent with boards being involved in the appointment of accounting executives, and monitoring in this way the firm's accounting function.

Keywords: Accounting executives; External appointments; Boards of directors; Forced turnover (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eee:bracre:v:47:y:2015:i:1:p:46-65

DOI: 10.1016/j.bar.2014.08.005

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