CEO/CFO turnover and subsequent remediation of information technology material weaknesses

Wanyun Li, Soon-Yeow Phang, Shuk Ying Ho

Research output: Contribution to journalArticleResearchpeer-review

3 Citations (Scopus)

Abstract

Adding to prior research on internal control material weaknesses (ICMW), our study investigates whether information technology material weaknesses (ITMWs) are associated with CEO/CFO turnover, and whether their turnover will promote subsequent remediation. We find that disclosures of ITMW are positively associated with CEO/CFO turnover; however, only CEO turnover promotes subsequent remediation. Our findings on ITMW are different from the prior findings on ICMW - aligned with prior research on ICMW, ITMWs are associated with CEO/CFO turnover; however, unlike prior research on ICMW suggests, dismissals of CFOs do not promote subsequent remediation of ITMW. Thus, future research should consider ICMW and ITMW separately in the examination of their consequences and remediation. Accounting and Finance

Original languageEnglish
Pages (from-to)2553-2577
Number of pages25
JournalAccounting & Finance
Volume59
Issue number4
DOIs
Publication statusPublished - Dec 2019

Keywords

  • CEO/CFO turnover
  • Information technology material weakness
  • Internal control
  • Remediation
  • SOX section 404

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