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The Watchful Eye: How Does the Prominence of Chief Audit Executives Curb Financial Misconduct?

Chenyong Liu et al.

Journal of Forensic Accounting Research2025https://doi.org/10.2308/jfar-2024-009article
AJG 2ABDC B
Weight
0.37

Abstract

Financial misconduct is a significant threat to capital markets, with severe negative consequences for stakeholders. This study explores the role of Chief Audit Executives (CAEs) in mitigating financial misconduct, highlighting their importance in enhancing internal audits and governance processes. Using hand-collected data from S&P 500 companies’ corporate leadership teams, we find that firms with prominent CAEs are less likely to engage in financial misconduct. This relationship is especially pronounced in companies with strong teamwork culture. Entropy balancing, two-stage least-squares (2SLS) procedure, and placebo tests support our results, underscoring the robustness of the findings. This study provides significant implications for corporate governance practices and regulatory policies. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M14; M42; G34.

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https://doi.org/https://doi.org/10.2308/jfar-2024-009

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@article{chenyong2025,
  title        = {{The Watchful Eye: How Does the Prominence of Chief Audit Executives Curb Financial Misconduct?}},
  author       = {Chenyong Liu et al.},
  journal      = {Journal of Forensic Accounting Research},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2308/jfar-2024-009},
}

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.