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Dynamic Accounting Information Uncertainty Following CFO Turnover

Jun Yeung Hong et al.

Australian Accounting Review2025https://doi.org/10.1111/auar.70004article
AJG 2ABDC B
Weight
0.37

Abstract

This paper investigates the impact of CFO turnover on value relevance. We focus on CFOs because they have primary responsibility for financial reporting quality. We hypothesise that CFO turnover leads to uncertainty about financial reporting quality and the timeliness of financial disclosures, thereby reducing value relevance. Using a sample of US publicly listed firms from 2013 to 2020, we find that CFO turnover reduces value relevance, and the negative relation between CFO turnover and value relevance resolves within three years. Furthermore, we find that CFO turnover following financial restatements does not affect value relevance. These results are consistent with the view that CFO turnover influences stakeholders’ uncertainty regarding financial reporting quality, which diminishes as the new CFO stays longer at the firm. In addition, the impact of CFO turnover on value relevance varies depending on the reason for turnover (e.g., restatement or dismissal). The results highlight the importance of CFO turnover in the market perception of financial reporting risk.

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https://doi.org/https://doi.org/10.1111/auar.70004

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@article{jun2025,
  title        = {{Dynamic Accounting Information Uncertainty Following CFO Turnover}},
  author       = {Jun Yeung Hong et al.},
  journal      = {Australian Accounting Review},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1111/auar.70004},
}

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Dynamic Accounting Information Uncertainty Following CFO Turnover

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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.