Financial statement comparability and CEO turnover

: U.S. evidence

Abstract

Prior literature documents evidence consistent with the prediction that comparable financial statements across firms can reduce users' information processing cost. This study examines the role of financial statement comparability in the context of an agency model where board of directors evaluates executive managers' performance. Using the measure developed by De Franco et al. (2011), this study provides empirical evidence that firm with more accounting comparable peers is more likely to fire badly-performing CEOs, more likely to use relative performance evaluation method, and experience better performance after CEO turnovers. Taken together, this study indicates that financial statement comparability improves the efficiency of boards' CEO dismissal decisions.

Date of Award	2 Oct 2013
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Chansog KIM (Supervisor)