6. We also collected several other variables at the same time that do not appear in our primary analysis. We use total years of work experience (TOTALEXP) and years of work experience in the present company (COMPEXP) as alternatives to CFOEXP in sensitivity analyses. As expected, both measures are highly correlated with CFOEXP, and both measures are significant when included in the logit model in place of CFOEXP. In addition, the name of any audit firm that the CFO previously worked for is collected and is compared to the name of the company’s current audit firm to investigate, as a separate analysis, whether restatements occur more often when the CFO previously worked for the company’s current audit firm. Previous research (Lennox 2005) suggests
such a link. However, when the variable is included in the logit model with our other variables, its coefficient is not significant.
7.Although the D&B Reference Book of Corporate Managements is not comprehensive, we could not find another source that systematically collects detailed data on the background of CFOs over the sample period of 1997–2002.
8.All restatements involved a change in previously reported accounting numbers.