CFO and Auditor Departures Near Restatements

The chance of a CFO departure increases near the time a restatement is filed, but this increase is primarily due to resignations, not dismissals. Auditor departures, both resignations and dismissals, are more prevalent near the issuance of a restatement. While approximately 24% of the general population tend to lose a CFO or auditor in a given year, about 37% of companies that file a restatement experience such a departure. Companies that file a financial restatement have an increased chance of experiencing a departure by both the CFO and Auditor.

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