IDEAS home Printed from https://ideas.repec.org/a/eme/arapps/ara-01-2022-0015.html
   My bibliography  Save this article

Ex-auditor executives and investment efficiency: evidence from Indonesia

Author

Listed:
  • Agnes Aurora Ngelo
  • Iman Harymawan
  • Mohammad Nasih

Abstract

Purpose - This study aims to examine the relationship between the presence of ex-auditor chief executive officers (CEOs) and ex-auditor chief financial officers (CFOs) with the company's investment efficiency decisions. Design/methodology/approach - The authors use non-financial Indonesian listed firms, and the authors obtain 2,763 firm-year observations of ex-auditor CEOs and 2,708 firm-year observations of ex-auditor CFOs from 2010–2019. Findings - The results show that ex-auditor CEOs tend to make efficient investment decisions, while ex-auditor CFOs do not. However, when a company has a CEO and a CFO who are both former auditors, there is a significantly stronger positive relationship with investment efficiency. These results indicate that working experience as an auditor can optimally facilitate the decision regarding investment level. Moreover, the results suggest that the CEO, as top management, has more influence in providing the company's final investment decisions, whereas the CFO plays a role in providing investment recommendations to the CEO. The results of this study are consistent with the use of alternative measurements and the robustness test of Coarsened Exact Matching (CEM). Practical implications - The results of this study can contribute as material for consideration by company management in selecting company organs with an auditor background to secure efficient investment. Originality/value - This study specifically examines the experience, values, and particular characteristics of top management with an auditor background on the company's strategic decisions. This study is also based on the phenomenon that the number of ex-auditor CEOs and CFOs in Indonesia tends to increase every year.

Suggested Citation

  • Agnes Aurora Ngelo & Iman Harymawan & Mohammad Nasih, 2022. "Ex-auditor executives and investment efficiency: evidence from Indonesia," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 30(4), pages 559-580, September.
    • Handle: RePEc:eme:arapps:ara-01-2022-0015
    DOI: 10.1108/ARA-01-2022-0015
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/ARA-01-2022-0015/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/ARA-01-2022-0015/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/ARA-01-2022-0015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:arapps:ara-01-2022-0015. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.