Fu Cheng and Shanshan Ji. Study on the Impact of CFO Background Traits on the Quality of Accruals and the Moderating Role of Internal Control. Dynamic Systems and Applications 29 (2020) No. 11, 3249 – 3274

https://doi.org/10.46719/dsa202029119

ABSTRACT.
Taking Chinese A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2008 to 2017 as research samples, this paper explores and empirically tests the impact of CFO background traits on the quality of accruals from six dimensions of CFO’s age, tenure, senior professional title, legal background, financial background and overseas background by using multivariate regression model. The results show that: the age, tenure, senior accountant title and legal background of CFOs are positively correlated with accruals quality, while the financial background and overseas background of CFOs are negatively correlated with accruals quality; CFO tenure has a stronger effect than CFO age on improving the quality of accruals; CFO legal expertise has a stronger effect than CFO accounting expertise on improving the quality of accruals. Although the financial background and overseas background of CFOs have similar degree of inhibition on the quality of accruals, they complement each other. In addition, this paper further explores the moderating role of internal control on the relationship between CFO background traits and accruals quality by using moderating effect model, and concludes that the role of CFO tenure, senior title and legal background in improving accruals quality is weakened, while the role of CFO financial background in reducing accruals quality is enhanced with the improvement of internal control quality.

Keywords: CFO background traits; accruals quality; internal control; moderating effect.