Foreign ownership and auditor choice
We take advantage of the unique institutional background of the B-share stock market in China to explore the impact of foreign investors on auditor choice. Our results show that the percentage of B-share firms audited by Big 4 auditors has decreased with both economic and statistical significance si...
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| Veröffentlicht in: | Journal of accounting and public policy 2014-07, Vol.33 (4), p.401-418 |
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| container_title | Journal of accounting and public policy |
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| creator | He, Xianjie Rui, Oliver Zheng, Liu Zhu, Hongjun |
| description | We take advantage of the unique institutional background of the B-share stock market in China to explore the impact of foreign investors on auditor choice. Our results show that the percentage of B-share firms audited by Big 4 auditors has decreased with both economic and statistical significance since the segmented B-share market was opened to domestic investors in 2001. We find that the negative effect of opening the B-share market on demand for high audit quality is more pronounced for firms with greater decreases in foreign ownership and for firms with strong incentives to be opaque, such as those in a weak institutional environment, firms with more “other receivables,” firms with more related-party transactions, and firms with political connections. Additional analysis shows that our results are not driven by the concurrent decline in capital-raising activities in the B-share market. |
| doi_str_mv | 10.1016/j.jaccpubpol.2014.04.002 |
| format | Article |
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| identifier | ISSN: 0278-4254 |
| ispartof | Journal of accounting and public policy, 2014-07, Vol.33 (4), p.401-418 |
| issn | 0278-4254 1873-2070 |
| language | eng |
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| source | Elsevier ScienceDirect Journals Complete; PAIS Index |
| subjects | Auditing Auditors Big Four accounting firms China China (People's Republic) Decision making Environment Foreign ownership Investors Markets Securities markets Significance Stock exchange Stock exchanges Stock market Studies |
| title | Foreign ownership and auditor choice |
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