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An International Meeting of American Accounting
Association
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Has the Likelihood of Appointing a CEO with an Accounting/Finance Background Changed in the Post-Sarbanes-Oxley Era? |
Charles P. Cullinan
Bryant Unversity
Pamela Roush
University of Central Florida
Abstract: The Sarbanes-Oxley Act was passed in July 2002, and was designed to improve the accuracy of financial reporting. Among the Act’s many provisions are requirements for the CEO of publicly-traded companies to certify the accuracy of their financial statements and to report on the adequacy of their internal control system. Such certification requirements may enhance the value of accounting/finance experience among candidates for a CEO position. This paper uses a sample of CEO changes to determine whether the prevalence of CEOs with accounting/finance backgrounds has changed in the post-Sarbanes era. Using a sample of 264 CEO changes, we find that the percentage of newly-appointed CEOs with accounting/finance backgrounds significantly increased in the post-Sarbanes period compared to the pre-Sarbanes period. These results suggest that the Sarbanes-Oxley Act may have changed the desired background characteristics of newly-appointed CEOs.