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The Relationship Between CFO Qualifications and Internal Control Weakness

Author

Listed:
  • Yeh Yaying C.

    (An Associate Professor of Framingham State University, Department of Accounting, Economics, and Finance, USA)

  • Venezia Chiulien C.

    (Professor of Frostburg State University, Department of Accounting, USA)

  • Yang Tzu-Ya

    (Is a staff of Deloitte and Touche, USA)

Abstract

This study explores the relationship between CFO qualifications and a firm’s internal control weakness (ICWs). We use three measures for CFO competence: financial/accounting background, seniority, and education. Using a sample of Taiwanese listed firms from 2012 to 2015, the results of this study show a negative relationship between CFO financial/accounting background and seniority with internal control weakness, indicating firms with higher quality CFOs experience a lower number of ICWs. CFO education level, however, is not related with a firm’s internal control weakness. The results imply that capable CFOs can effectively implement a good internal system. The result of this study provides practical and policy implications.

Suggested Citation

  • Yeh Yaying C. & Venezia Chiulien C. & Yang Tzu-Ya, 2022. "The Relationship Between CFO Qualifications and Internal Control Weakness," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 18(2), pages 21-29, June.
    • Handle: RePEc:vrs:finiqu:v:18:y:2022:i:2:p:21-29:n:6
    DOI: 10.2478/fiqf-2022-0010
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    More about this item

    Keywords

    CFO qualification; Financial Accounting background; CFO competence; Seniority; Internal control weakness;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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