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Financial Closing Time, Implied Cost of Equity, IT capabilities, Senior IS Executives
Financial closing time is the time lag between a firms fiscal year end and earnings announcement. In this study, we first find an association between longer financial closing time and higher implied cost of equity. Improving financial closing time can help firms raise equity capital more efficiently. We posit that senior information executives can help improve firms' IT capabilities and reduce financial closing time. The empirical result suggests that firms having senior information executives (as measured by executive compensation) can reduce financial closing time for more than four days. We contribute by showing that senior IS executives are important for a public company to satisfy investors' information needs in the fast and competitive modern capital markets.