A political-economic analysis of auditor reporting and auditor switches

• 成果类型: Article
• 署名作者: Chan, KH; Lin, KZ; Mo, PLI
• 署名单位: Hong Kong Polytechnic University; Lingnan University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-006-6394-z
• 发表日期: 2006
• 页码: 21-48
• 关键词: earnings management; AGENCY COSTS; MARKET; opinions; OWNERSHIP; lawsuits

摘要

This Study examines whether auditor opinions are affected by political and economic influences from governments. We use auditor locality (local versus non-local) to capture such influences from local governments in China. Based on data from China's stock markets for the period 1996-2002, we find that local auditors, who have greater economic dependence on local clients and are subject to more political influence from local Governments than non-local auditors, are inclined to report favorably on local government-owned companies to mitigate probable economic losses. Moreover, companies with qualified opinions are more likely to switch from a non-local auditor to a local auditor than companies with unqualified opinions. Contrary to some prior Studies, we find that in China's political environment, local government-owned companies that switched from a non-local auditor to a local auditor after receiving a qualified opinion can Succeed in opinion shopping.