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Does CIO risk appetite matter? Evidence from information security breach incidents

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  • Feng, Cecilia (Qian)
  • Wang, Tawei

Abstract

After a series of recent high-profile information security breach incidents, practitioners have engaged in heated debates about the role of the chief information officer (CIO), particularly his/her role in information security risk management. However, little is known in the academic literature about how a CIO's appetite for risk affects the effectiveness of information security management. We address this gap by examining how a CIO's risk appetite is associated with information security breach incidents. We show that the level of CIO risk aversion is negatively associated with the likelihood of breach incidents. Furthermore, we find that this association is stronger if the company's chief executive officer (CEO) is also risk averse. In additional analyses, we show that the relationship between CIO risk aversion and breach incidents varies depending on breach type and the strategic position of the company and is moderated by the CIO's power.

Suggested Citation

  • Feng, Cecilia (Qian) & Wang, Tawei, 2019. "Does CIO risk appetite matter? Evidence from information security breach incidents," International Journal of Accounting Information Systems, Elsevier, vol. 32(C), pages 59-75.
    • Handle: RePEc:eee:ijoais:v:32:y:2019:i:c:p:59-75
    DOI: 10.1016/j.accinf.2018.11.001
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    1. Zhang, Yimei & Smith, Thomas, 2023. "The impact of customer firm data breaches on the audit fees of their suppliers," International Journal of Accounting Information Systems, Elsevier, vol. 50(C).
    2. Habib Saragih, Arfah & Ali, Syaiful & Suwardi, Eko & Utomo, Hargo, 2024. "Finding the missing pieces to an optimal corporate tax savings: Information technology governance and internal information quality," International Journal of Accounting Information Systems, Elsevier, vol. 52(C).
    3. Smith, Thomas & Tadesse, Amanuel F. & Vincent, Nishani Edirisinghe, 2021. "The impact of CIO characteristics on data breaches," International Journal of Accounting Information Systems, Elsevier, vol. 43(C).
    4. Jacob Haislip & Jee-Hae Lim & Robert Pinsker, 2021. "The Impact of Executives’ IT Expertise on Reported Data Security Breaches," Information Systems Research, INFORMS, vol. 32(2), pages 318-334, June.
    5. Zhen, Jie & Xie, Zongxiao & Dong, Kunxiang, 2021. "Impact of IT governance mechanisms on organizational agility and the role of top management support and IT ambidexterity," International Journal of Accounting Information Systems, Elsevier, vol. 40(C).

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