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JOURNAL OF ACCOUNTING AND FINANCE
Appointment of New Executives and Subsequent SOX 404 Opinion
Author(s): Abhijit Barua, Yun-Chia Yan
Citation: Abhijit Barua, Yun-Chia Yan, (2011) "Appointment of New Executives and Subsequent SOX 404 Opinion" Vol. 11, Iss. 2, pp. 78 - 90
Article Type: Research paper
Publisher: North American Business Press
Abstract:
The chief financial officer (CFO) and the chief executive officer (CEO) of a company play a crucial role
in financial reporting process. This paper examines the relation between the appointment of the new
executives and the receipt of subsequent initial SOX 404 opinions. Our results show that adverse SOX 404
reports will be more likely at firms that have recently hired a new CFO. This has important implications,
from a public interest standpoint, for both investors and auditors. Overall, the paper contributes to the
corporate governance and internal control weakness research by providing direct evidence regarding
CFO turnover and subsequent SOX 404 opinions.
