Publication Type

Journal Article

Version

submittedVersion

Publication Date

10-2022

Abstract

A CFO gap arises when the CFO position is left vacant for a period between the departure of the old CFO and the appointment of a new CFO. We find that CFO gaps are fairly common; over the sample period 2004–2016, approximately one-third of CFO turnovers are associated with a CFO gap, lasting on average two quarters and two months. CFO gaps are more likely for firms that face more labor market search frictions and with financial reporting and performance issues, and are less likely for firms with succession plans and with greater growth opportunities. While CFO gaps are not associated with significant changes in firms’ financial reporting quality, they are associated with significantly negative changes in firms’ voluntary disclosure frequency and analysts’ forecast quality. Our findings shed light on the factors that influence top executive gaps and the impact of such gaps on firms’ information environment.

Keywords

CFO gaps, CFO turnovers, information environment

Discipline

Accounting | Corporate Finance | Organizational Behavior and Theory

Research Areas

Corporate Governance, Auditing and Risk Management

Publication

Accounting Review

Volume

97

Issue

6

First Page

173

Last Page

200

ISSN

0001-4826

Identifier

10.2308/TAR-2019-0001

Publisher

American Accounting Association

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.2308/TAR-2019-0001

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