Does an Executive’s Role and Susceptibility to Workplace Gender Biases Matter? Evidence from Chief Accounting Officers and Financial Reporting Failures

ABSTRACT We examine whether executives are more likely to avoid reporting failures when turnover risk is higher. Consistent with accountability falling on executives with direct responsibility, we document the turnover rate for CAOs is highest after a restatement, followed by CFOs and CEOs. Further, we find higher turnover following a restatement for female executives when their workplace is more susceptible to gender biases. Next, we consider how higher turnover risk, due to the executive’s role and gender, influence reporting failures. We find a reduction in restatement likelihood associated with female CAOs in workplaces that are more susceptible to gender biases. Conversely, we find no evidence of an association between gender and restatements when the workplace is less susceptible to gender biases. Accordingly, our situation-based evidence suggests innate female risk aversion is not a complete explanation for reporting differences across gender. Data Availability: All data used in the study are publicly available. JEL Classifications: J01; J16; M12; M14; M41; O16.