Extending the literature on information technology control weaknesses (ITCWs), we investigate the strategic role of chief information officers (CIOs) in maintaining adequate internal controls and remediating ITCWs. Drawing on institutional theory and sunk cost effect, we develop three hypotheses. We adopt an archival approach and obtain CIO turnover and ITCW data for 890 distinct firms, finding that: (i) ITCW disclosures may not increase the likelihood of CIO turnover, (ii) CIOs’ backgrounds are associated with the likelihood of turnover, and (iii) CIO turnover increases the likelihood of subsequent ITCW remediation. Theoretically, we extend the literature by investigating the strategic role of CIOs in remediating ITCW. Practically, we find that common practices by firms to retain CIOs in ITCW situations are ineffective for ITCW remediation. Firms are encouraged to reconsider these practices.
- CIO turnover
- Information technology control weaknesses (ITCWs)
- Internal controls