Labor Market Outcomes of Restatements for Corporate Accountants

Our study examines the impact of nonfraud financial restatements on the careers of corporate accountants. Using LinkedIn data, we identify a sample of accountants working at 201 firms that restated their financial statements between 2004 and 2014. We find that compared with human resource employees within the same company or corporate accountants in matched control firms, accountants in restatement firms, particularly senior staff, have a higher rate of departure and a lower probability of moving to a higher-ranked position outside the company after a restatement is announced. Using a longer job search period as a measure of being forced to leave, we find that the higher departure rate for senior accountants…