CEO Turnover and Internal Control Material Weaknesses

The practical aim of the paper is to examine whether CEO turnover occurs under account-level and company-level internal control material weaknesses (ICMWs) in Tehran Stock Exchange (TSE) or not. The authors utilized data from 99 Iranian firms' financial statements as the sample over 5 years (2013-2018). A total of 594 observations were analyzed using a logit regression model. Empirical findings revealed there is no significant relationship between account-level and company-level ICMWs with CEO turnover. Therefore, establishing appropriate internal control is not merely dependent on the CEOs but may require committed staff withholding strong moral values. This paper develops the literature and generates empirical evidence of the relation between CEO turnover and ICMWs in Iran's specific context as a developing country.