Title

Has The Likelihood Of Appointing A Ceo With An Accounting/Finance Background Changed In The Post-Sarbanes Oxley Era?

Keywords

Accounting experience; CEO background; Financial experience; Sarbanes-Oxley Act

Abstract

Congress passed the Sarbanes-Oxley Act (SOX) in July 2002 to improve the accuracy and reliability of financial reporting. The Act increased boards of directors' responsibilities for financial reporting and control. Did it consequently increase boards' preferences for a CEO with financial experience to protect against the potential reputational and/or legal losses that directors incur when financial scandals happen? We investigated whether newly appointed CEOs in the post-SOX period were more likely to have accounting or finance experience than in the pre-SOX period. Using a sample of 264 CEO changes from 2001 to 2004, we found that the percentage of newly-appointed CEOs with accounting/finance backgrounds significantly increased in the post-SOX period compared to the pre-SOX period. Our results suggest that the events surrounding the passage of the Sarbanes-Oxley Act may have affected the CEO background experience preferred by boards of directors. © 2011 Elsevier Ltd.

Publication Date

4-1-2011

Publication Title

Research in Accounting Regulation

Volume

23

Issue

1

Number of Pages

71-77

Document Type

Article

Personal Identifier

scopus

DOI Link

https://doi.org/10.1016/j.racreg.2011.03.005

Socpus ID

79958834534 (Scopus)

Source API URL

https://api.elsevier.com/content/abstract/scopus_id/79958834534

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