Do Accountants Make Better Chief Financial Officers?

49 Pages Posted: 14 Dec 2013 Last revised: 15 Mar 2016

See all articles by Rani Hoitash

Rani Hoitash

Bentley University - Department of Accountancy

Udi Hoitash

Northeastern University - Accounting Group

Ahmet C. Kurt

Suffolk University

Date Written: March 14, 2016

Abstract

We examine whether chief financial officers (CFOs) with accounting backgrounds (accountant CFOs) are associated with more conservative corporate outcomes. We find that, in high-growth industries, firms with accountant CFOs invest less in research and development and capital expenditures and are less likely to engage in external financing. In low-growth industries we find that firms with accountant CFOs exhibit greater cost efficiency. Our results are consistent with risk aversion on the part of accountant CFOs. We further document that accountant CFOs are negatively associated with firm value in high-growth industries and positively associated with firm value in low growth industries.

Keywords: Chief financial officer; Accounting background; Risk aversion; Cost control; Investment; Financing activity; Firm value

JEL Classification: M12, M41, M43, G32, G34

Suggested Citation

Hoitash, Rani and Hoitash, Udi and Kurt, Ahmet C., Do Accountants Make Better Chief Financial Officers? (March 14, 2016). Journal of Accounting & Economics (JAE), Forthcoming. Available at SSRN: https://ssrn.com/abstract=2367250 or http://dx.doi.org/10.2139/ssrn.2367250

Rani Hoitash (Contact Author)

Bentley University - Department of Accountancy ( email )

175 Forest Street
Waltham, MA 02452-4705
United States

Udi Hoitash

Northeastern University - Accounting Group ( email )

360 Huntington Ave.
Boston, MA 02115
United States
671-373-5839 (Phone)

Ahmet C. Kurt

Suffolk University ( email )

Boston, MA 02108
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
532
rank
48,032
Abstract Views
2,963
PlumX Metrics