In high-growth industries such as electronics and pharmaceutical products, accountant CFOs were found to be more risk averse than nonaccountant managers, resulting in more conservative corporate outcomes. CFOs in these environments were reported to invest less in R&D and capital expenditures and to be less inclined to engage external financing. Given the central role that risk taking plays in high-growth industries, their results revealed a negative association between CFOs with accounting backgrounds and overall firm value.
In low-growth industries such as transportation and manufacturing, on the other hand, the study suggests a positive relation between accountant CFOs and firm value. Accountant CFOs were associated with greater cost efficiency in these industries, and their conservatism allowed for better control of expenditures. In short, Hoitash states, “There is no one-size-fits-all strategy for appointing a new CFO.”