CEO’s financial and accounting expertise on earning quality: The moderating role of audit quality

This study examined the moderating role of audit quality on the relationship between the CEO’s accounting and financial expertise and earnings quality. We use the least squares method to perform a sample regression of 652 companies listed on the Vietnam Stock Exchange from 2017 to 2022. The results show a significant positive correlation between CEOs’ accounting and finance expertise, audit quality, and earnings quality. This can be explained by the fact that improved audit quality will allow us to verify the financial disclosures of listed companies. Therefore, reducing adverse selection and moral hazard can ensure quality information in financial reporting. However, audit quality does not mediate the relationship between the CEO‘s financial and accounting expertise and earnings quality. This finding has important implications for managers in human resource management activities, given that organizing and hiring a CEO with accounting and finance expertise is expected to improve their earnings quality.