Dr. Zabihollah Rezaee's Paper Accepted by Corporate Governance: An International Review (CGIR)

MEMPHIS, TN—October 15, 2019. Dr. Zabihollah (Zabi) Rezaee, Thompson-Hill Chair of Excellence and professor of Accountancy in the Fogelman College of Business and Economics at the University of Memphis, received acceptance for a paper titled "CEO Financial Background and Internal Control Weaknesses" to be published in Corporate Governance: An International Review (CGIR).

Specifically, this paper examined the association between the financial background of chief executive officers (CEOs) and internal control weaknesses (ICWs) of the respective companies. Using a sample of Iranian firms for the period 2007-2017, a significant negative association was found between CEOs with financial expertise and ICWs. The negative association between CEO financial expertise and ICWs is stronger if the CEO is recruited from inside the firm.

The main results from the research are robust after controlling for the potential selection issue, fixed effects at the firm-level, and the impact of the Iranian internal control new regulation. Furthermore, the results remain unchanged after controlling for other CEO characteristics, audit committee characteristics, and audit fees, as well as using an alternative measure of financial expertise.

The research and subsequent paper contribute to the extant literature by examining the association between CEOs' financial background and ICWs—a theme that remains largely unexplored in previous research. This study yields important implications for regulators, especially in emerging markets, regarding the improvement of financial reporting quality and the effectiveness of internal controls. In particular, the findings are beneficial for auditors when assessing the risks regarding their clients' material weaknesses, as well as shareholders and the board of directors when a new CEO in being considered.

"CEO Financial Background and Internal Control Weaknesses" is coauthored by K. Asiaei, and J. Oradi from University of Malaya, Malaysia. The acceptance rate in the CGIR is currently less than 5% and is ranked as "A" Journal.

Dr. Zabi Rezaee is an internationally recognized expert, speaker and author in the field of corporate sustainability Performance, Compliance Accountability and Integrated Reports. He was recently featured as the keynote speaker for Energy Efficiency Day which targeted business owners, CEO's, COO's and CFO's, and led the session, "How Sustainability Impacts the Boardroom and the Bottom Line, from an Accounting Point of View."