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The authors study the role of executive functional background in explaining goodwill impairment choices. They focus on top executives (CEOs and CFOs) whose employment history includes experience in investment banking, auditing, or private equity/venture capital. On average, they find that former auditors are significantly more likely to impair goodwill. However, further investigation reveals that former auditors and investment bankers are more likely to impair goodwill when their reputation concerns are low, suggesting that those executives are subject to their own opportunistic motives.
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