Do CFO career concerns matter? Evidence from IPO financial reporting outcomes
Gounopoulos, Dimitrios and Loukopoulos, Georgios and Loukopoulos, Panagiotis and Zhang, Yu (2024) Do CFO career concerns matter? Evidence from IPO financial reporting outcomes. Journal of Corporate Finance, 87. 102626. ISSN 0929-1199 (https://doi.org/10.1016/j.jcorpfin.2024.102626)
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Abstract
We find that Chief Financial Officers (CFOs) with greater career concerns are more diligent and conservative in preparing financial statements during an Initial Public Offering (IPO). Additional tests exploiting exogenous variation in managerial career concerns suggest that our documented relations are not sensitive to unobservable omitted factors. Furthermore, we document that CFOs who are relatively more concerned about their future job prospects are more sensitive when there is greater scrutiny or higher litigation risk and are less likely to succumb to undue pressures from influential shareholders to exaggerate the firm's prospects. Finally, we show that CFOs with longer decision horizons prefer more transparency during the IPO process, which in turn, translates to superior post-IPO performance and better labor market outcomes than their counterparts. Overall, our findings indicate that career concerns play a disciplining role during IPOs and that CFOs exploit these high-visibility events to accelerate their career trajectory.
ORCID iDs
Gounopoulos, Dimitrios, Loukopoulos, Georgios, Loukopoulos, Panagiotis ORCID: https://orcid.org/0000-0002-8790-1041 and Zhang, Yu;-
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Item type: Article ID code: 89993 Dates: DateEvent31 August 2024Published18 July 2024Published Online8 July 2024AcceptedSubjects: Social Sciences > Commerce > Business Department: Strathclyde Business School > Accounting and Finance Depositing user: Pure Administrator Date deposited: 22 Jul 2024 15:56 Last modified: 01 Oct 2024 08:14 URI: https://strathprints.strath.ac.uk/id/eprint/89993