Does Mutual Tenure of CFOs and Auditors Affect Accounting Information Comparability? Evidence from China

Little work has been conducted regarding the effect of mutual tenure of CFOs and auditors on accounting information comparability. Using data of Chinese listed companies from 2011 to 2019, this study shows that the mutual tenure of CFOs and auditors contributes to a higher accounting information comparability. Further investigations imply that the main effect is more pronounced among auditees with lower operational complexity and auditors with greater competence and expertise. Finally, we find that the strong correlation cannot be extended to other core decision-makers (i.e., CEOs and board chairmen) and that mutual tenure lowers debt costs and enhances firm value.