Date of Award
Spring 2017
Degree Name
Bachelor of Science (BS)
Advisor(s)
Emma Peng
Abstract
This study explores the impact of Chief Financial Officers' (CFOs) experience—whether internal or external to the company—on their performance, particularly in the context of accounting quality. Analyzing the top 100 firms by total assets in the S&P 500 using a regression model and the Jones (1991) model for discretionary accruals, the research aims to contribute to management theory on hiring practices. The findings reveal no significant relationship between a CFO's hiring origin (internal vs. external) and the quality of accounting, challenging prevalent management theories that favor internal hires for their company-specific knowledge. This insignificance persisted across various significance levels and analytical adjustments, suggesting that the high competence level required for the CFO role may override the advantages of company-specific experience. The study's sample, limited to large, successful firms, may have influenced the results due to their ability to select from a highly qualified pool of candidates, potentially overshadowing the need for internal experience. The findings invite further investigation into smaller firms and other sectors to fully understand the dynamics between CFO experience and performance.
Recommended Citation
Bree, Dermot, "The Accruals Quality of CFOs Based on Company Experience" (2017). Gabelli School of Business Honors Thesis Collection. 126.
https://research.library.fordham.edu/gabelli_thesis/126
