If you are a manager, chief financial officer or auditor working for a company that comes out with a restatement, start looking for another job. That's the only conclusion you can draw from a new study from Anup Agrawal andCooper who are both at the University of Alabama's Culverhouse College of Business.
Their study, Corporate Governance Consequences of Accounting Scandals:Evidence from Top Management, CFO and Auditor Turnover, found that restating firms have greater turnover of CEOs, top management and CFOs than control firms. It revealed that during the three-year period of the study, restating CEOs, CFOs and top management experience turnover rates of 53 per cent, 65 per cent and 85 per cent respectively. That was well up on the control firms where it was 34 per cent, 43 per cent and 59 per cent respectively. All up, they face, respectively, a 14 per cent, 10 per cent and 8.5 per cent greater chance of being replaced.
There is an even greater likelihood of the person losing their job when there is a big restatement.