Accounting and Auditing Studies

Accounting and Auditing Studies

The Effect of CEO's Financial Distress on Audit Quality: Considering the Moderating Effect of Managerial Ability CEO's Financial Knowledge

Document Type : Original Article

Authors
Mohsen Dastgir 1
Bahram Ghanizadeh 2
Afsaneh Soroushyar 3
1 Professor, Department of Accounting, Isf.C., Islamic Azad University, Isfahan, Iran
2 Ph.D. Department of Accounting, Isf.C., Islamic Azad University, Isfahan, Iran
3 Associate Professor, Department of Accounting, Isf.C., Islamic Azad University, Isfahan, Iran
10.22034/iaas.2025.230960
Abstract
The level of financial knowledge and ability of CEOs can play a vital role in the success, failure, improvement of performance, and reduction of challenges of economic enterprises. Therefore, it is expected that the educational and experiential characteristics of CEOs, such as university education, financial knowledge, experience, and their ability, can have an impact on reducing the financial crisis of listed companies. The purpose of this study is to examine the impact of CEOs' financial knowledge on financial crises and also to examine the impact of their abilities on the relationship between CEOs' financial knowledge and financial crises. The statistical population of this study is the companies listed on the Tehran Stock Exchange, and the statistical sample size includes 147 companies for the years 2011 to 2019, which were selected through systematic sampling. To test the research hypotheses, panel data and multivariate logistic regression were used. The results of the research showed that the financial knowledge of CEOs does not have a significant effect on the financial crisis. Another result of the research indicates that managerial ability has a negative and significant effect on financial crisis. Also, the managerial ability does not have a moderating effect on the relationship between financial knowledge of executive managers and financial crisis.
Keywords
CEOs' Financial Knowledge
Managerial Ability
Financial Crisis
Risk Management
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Accounting and Auditing Studies
Volume 14, Issue 54
Summer 2025
Pages 5-26