Publication Type
PhD Dissertation
Version
publishedVersion
Publication Date
11-2022
Abstract
Many empirical research studies suggest that Chief Financial Officers (CFOs) with accounting qualifications improve company performance in various ways such as through better financial reporting accuracy (Aier et al., 2005), internal control (Li et al., 2010), corporate governance (Sun et al., 2015) and tax efficiency (Chen et al., 2020). This suggests that CFOs should be qualified in accounting. However, this study found that this may not always be the case.
By looking at the top listed companies in Singapore, it was found that a significant percentage of CFOs are not accounting qualified, which indicates a significant gap. The study conducted interviews with five groups of stakeholders and found that people who believe in the importance of CFOs’ accounting qualifications view it as a way for companies to signal their financial strength, which aligns with signalling theory. However, those who believe there is no need for CFOs to be accounting qualified tend to believe person-job fit (PJ-Fit) is a more important factor. The study found that when the company size is large, PJ-Fit is more important than signalling. This is because larger companies tend to have more resources to invest in identifying specific attributes of their CFO candidate than relying on the signalling effect. They also have stronger legitimacy and more availability of staff with accounting qualifications.
This study’s findings help deepen the understanding between prior research and the implications for practising managers. This study also suggested areas for future research.
Keywords
CFO accounting qualification, CFO signalling theory, CFO job fit, accounting qualification, qualified accountants, company size, accounting bodies, CFO
Degree Awarded
PhD in Business (General Management)
Discipline
Accounting | Management Sciences and Quantitative Methods
Supervisor(s)
GOMULYA, David Matius
First Page
1
Last Page
94
Publisher
Singapore Management University
City or Country
Singapore
Citation
LIM, Vincent Boon Seng.
Do Chief Financial Officers need to be qualified accountants? A study of whether and when accounting qualification may not be necessary for CFOs.. (2022). 1-94.
Available at: https://ink.library.smu.edu.sg/etd_coll/456
Copyright Owner and License
Author
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.