Reputation Recognition and Audit Outcomes: Evidence from Chinese Auditors

2021 ◽  
Author(s):  
Wanfu Li ◽  
Lixin (Nancy) Su ◽  
Yu Wang ◽  
Donghui Wu
Keyword(s):  
Chinese Auditors

scholarly journals Hometown Ties and the Quality of Government Monitoring: Evidence from Rotation of Chinese Auditors

2020 ◽  
Author(s):  
Jian Chu ◽  
Raymond Fisman ◽  
Songtao Tan ◽  
Yongxiang Wang
Keyword(s):  
Chinese Auditors

Chinese auditors’ views about independence and employer values

2012 ◽  
Vol 20 (1) ◽  
pp. 74-87 ◽  
Author(s):  
Ying Han Fan ◽  
Gordon Woodbine ◽  
Glennda Scully
Keyword(s):  
Chinese Auditors

scholarly journals An experimental examination of judgments of Chinese professional auditors in evaluating internal control systems

2015 ◽  
Vol 12 (4) ◽  
pp. 791-806
Author(s):  
Bella Zhuoru Zheng ◽  
Chris Patel ◽  
Elaine Evans
Keyword(s):  
Theoretical Model ◽  
Control Systems ◽  
Internal Control ◽  
The Other ◽  
Experimental Examination ◽  
Research Findings ◽  
Internal Control Deficiencies ◽  
Anglo American ◽  
Chinese Auditors ◽  
Audit Approach

Researchers have tended to assume that Anglo-American theories and practices are equally applicable to other countries with their unique contextual environments. The aim of this research is to show that the theoretical model and empirical research findings in Anglo-American countries, with respect to evaluation of internal control systems, are not applicable to China. Specifically, there are two approaches to evaluate internal control systems: one is a risk-based audit approach, and the other is a control-based audit approach. Morrill, Morrill, and Kopp (2012) show that Canadian accountants who relied on a risk-first approach identified significantly more internal control deficiencies than accountants who relied on a control-first approach. Contrary to the research findings in Canada, this study provides experimental evidence that Chinese auditors who relied on a control-first approach identified significantly more internal control deficiencies than auditors who relied on a risk-first approach. The findings have implications for global convergence of auditing practices.

Share price response to the SEC administrative proceedings against Chinese auditors

2019 ◽  
Vol 34 (9) ◽  
pp. 1131-1148
Author(s):  
Guoping Liu ◽  
Jerry Sun
Keyword(s):  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Share Price ◽  
Accounting Firms ◽  
Content Type ◽  
Share Prices ◽  
Audit Failure ◽  
Price Response ◽  
Chinese Auditors ◽  
Administrative Proceedings

Purpose The purpose of this study is to examines whether clients’ share prices responded to three events, including the Securities and Exchange Commission (SEC) launch of administrative proceedings against five Chinese accounting firms on December 3, 2012, for their failure to hand over audit work papers due to conflict of jurisdiction; the issuance of SEC Administrative Law Judge Elliot’s ruling on January 22, 2014; and the settlement of the administrative proceedings on February 6, 2015. Design/methodology/approach This study uses the Schipper and Thompson approach. Findings It is found that share prices responded negatively around December 3, 2012, for USA-listed Chinese companies who were audited by Chinese auditors. Originality/value This study provides evidence on how share prices reacted to SEC enforcement actions against an affair of non-audit failure.

Determinants and consequences of voluntary switches to Chinese auditors in Hong Kong

2019 ◽  
Vol 15 (3) ◽  
pp. 100158
Author(s):  
Zhenfeng Liu ◽  
Stephen Lin
Keyword(s):  
Hong Kong ◽  
Chinese Auditors

An Experimental Study of Hong Kong and Chinese Auditors' Perceptions of Auditor Independence

1999 ◽  
Vol 7 (2) ◽  
pp. 1-18 ◽  
Author(s):  
Ramesh Narasimhan ◽  
Stephanie S.H. Ng
Keyword(s):  
Experimental Study ◽  
Hong Kong ◽  
Auditor Independence ◽  
Chinese Auditors

scholarly journals Detecting fraud in Chinese listed company balance sheets

2017 ◽  
Vol 29 (3) ◽  
pp. 356-379 ◽  
Author(s):  
Yi Wei ◽  
Jianguo Chen ◽  
Carolyn Wirth
Keyword(s):  
Listed Company ◽  
Balance Sheet ◽  
Financial Statements ◽  
Common Source ◽  
Content Type ◽  
Balance Sheets ◽  
Cast Doubt ◽  
Chinese Auditors ◽  
Fraud Prediction ◽  
Fraudulent Financial Statements

Purpose This paper aims to investigate the links between accounting values in Chinese listed companies’ balance sheets and the exposure of their fraudulent activities. Design/methodology/approach Every balance sheet account is proposed to be a potential vehicle to manipulate financial statements. Findings Other receivables, inventories, prepaid expenses, employee benefits payables and long-term payables are important indicators of fraudulent financial statements. These results confirm that asset account manipulation is frequently carried out and cast doubt on earlier conclusions by researchers that inflation of liabilities is the most common source of financial statement manipulation. Originality/value Previous practices of solely scaling balance sheet values by assets are revealed to produce spurious relationships, while scaling by both assets and sales effectively detects fraudulent financial statements and provides a useful fraud prediction tool for Chinese auditors, regulators and investors.

Does the use of honorific appellations in audit reports connote higher financial misstatement risk? Evidence from China

2018 ◽  
Vol 26 (2) ◽  
pp. 154-181 ◽  
Author(s):  
Feng Chen ◽  
Xingqiang Du ◽  
Shaojuan Lai ◽  
Mary Ma
Keyword(s):  
Audit Quality ◽  
Positive Association ◽  
Auditor Independence ◽  
Accounting Firms ◽  
Content Type ◽  
Public Firms ◽  
Financial Misstatements ◽  
Financial Misstatement ◽  
Chinese Auditors ◽  
Audit Reports

Purpose From the sociolinguistic perspective, the purpose of this paper is to examine whether the honorific and actual-name appellations that Chinese auditors use to address clients in audit reports connote differential financial misstatement risk. Specifically, the authors hypothesize that auditors’ use of honorifics signals their inferior social status relative to their clients, thereby leading to compromised auditor independence, lower audit quality, and higher financial misstatement risk. Design/methodology/approach The authors use a sample of manually coded appellation data from audit reports of Chinese public firms between 2003 and 2012 to conduct the research. Findings The authors find significantly greater financial misstatements, both in terms of likelihoods and magnitudes, for companies addressed by honorifics than for those addressed by actual names. Moreover, compared to auditors’ consistent honorific usage, discretionary honorific usage has a stronger positive association with misstatements. The authors further show that the positive association between honorific usage and client misstatement risk weakens when the audit firm is a Top 10 accounting firms in China, is an industry specialist, is formed as a partnership, or resides in a more concentrated audit market. Originality/value This study contributes to the sociolinguistics literature in accounting and provides evidence supporting the reform proposed by the International Auditing and Assurance Standards Board to enhance the usefulness of audit reporting.

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