The influence of managers’ characteristics on qualitative materiality factors: Some empirical evidence

Journal title FINANCIAL REPORTING
Author/s Alessandra Allini, Ilaria Martino, Adele Caldarelli
Publishing Year 2026 Issue 2026/1
Language English Pages 29 P. 111-139 File size 168 KB
DOI 10.3280/fr202519992
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Purpose: This study investigates how Chief Financial Officers’ (CFOs) personal characteristics affect qualitative materiality decisions during the preparation of financial reporting. While materiality is a key principle in financial reporting, the subjective nature of qualitative judgments remains underexplored, particularly from the perspective of preparers rather than auditors. Methodology: Drawing on Upper Echelons Theory (UET), the study adopts a survey-based approach targeting 160 CFOs from IFRS-compliant, European-listed companies in France, Germany, Italy, and Spain. The survey captures CFOs’ weighting of qualitative materiality factors using a Likert scale. Findings: Results reveal that CFO characteristics significantly affect the integration of qualitative materiality factors. Specifically, older, longer-tenured CFOs and those with prior audit experience are more inclined to integrate qualitative factors into financial materiality decisions, reflecting a more conservative and risk-sensitive approach. Originality/value: The study shifts focus from auditors to financial statement preparers, offering novel insights into how materiality judgments are shaped at the preparatory stage. By integrating Upper Echelons Theory (UET) into the context of materiality assessments, the research introduces a behavioral perspective that enhances the understanding of how executive characteristics shape accounting judgments. This approach expands the boundaries of behavioral accounting literature and provides new insights into the subjective dimensions of financial statement preparation. Practical implications: Findings have implications for standard setters, regulators, and corporate governance by emphasizing the role of CFO characteristics in ensuring consistent and transparent financial reporting. Understanding these behavioral dynamics can inform better training, policy design, and oversight mechanisms.

Keywords: materiality, CFOs characteristics, qualitative factors

Jel codes: M41

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Alessandra Allini, Ilaria Martino, Adele Caldarelli, The influence of managers’ characteristics on qualitative materiality factors: Some empirical evidence in "FINANCIAL REPORTING" 1/2026, pp 111-139, DOI: 10.3280/fr202519992