A Political–economic Analysis of Auditor Reporting and Auditor Switches

Chan, Kitman; Lin, Kenny Z.; Mo, Phyllis Lai Lan

doi:10.1007/s11142-006-6394-z

Cited by 249 publications

(215 citation statements)

References 30 publications

(46 reference statements)

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“…Moreover, the coefficient associated with the liquid variable is negative of -0.35 and significant with the threshold of 5% with (P = 0,027) This result is coherent with the results of the studies (Yoke-Kai Chan andTerry S. Walter 1996 andNelson et al in 1988) which showed that the efforts of the auditor increase with the increase in the level of risk and decreases in the least risky companies with strong liquidities that can incite the auditors to certify their opinions without reservations and consequently positively influence the probability of having an audit opinion with reservations.…”

Section: Liquiditysupporting

confidence: 89%

Determinants of Audit Opinion after the Scandals of Enron: Empirical Validation in the French Context

Soltani¹

2016

IJBM

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This study examines the effect of regulatory changes on audit quality in the French context. The evaluation of the risks and the anomalies carried out by the auditors brings them control relating to the financial statements of the company in order to express an opinion on the effectiveness, the regularity, the sincerity and the faithful image of these documents, in a large complexity of the organizations the objective of this research consists in studying the effect of the evolutions of the regulation as regards legal audit on the estimate of the probability of having an opinion of audit with reserve which reinforces the independence of the auditor.A list of hypothesis related to the approached problems is proposed followed by an overview of the different theoretical propositions which are in place. From a sample of French companies in the SBF 250 over the period 2002-2011, the results show that the analysis of the conditions of receiving a qualified audit opinion is determined by: the variables of the financial health of the company, the inventory receivables which indicate the complexity of the audited firm and the characteristics of the audit.

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Section: Liquiditysupporting

confidence: 89%

Determinants of Audit Opinion after the Scandals of Enron: Empirical Validation in the French Context

Soltani¹

2016

IJBM

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“…In addition, firms can manage audit opinions by choosing auditors who are more inclined to issue favorable reports, such as switching from large, nonlocal auditors to small, local auditors that are more susceptible to the firms' influence when they receive modified audit opinions (Chan, Lin, & Mo, 2006;DeFond et al, 2000;Lin & Liu, 2009). These findings suggest that credit rating and auditing alone are not adequate to make firms become more investor friendly without the support of other external and internal governance mechanisms.…”

Section: External Mechanism: Market Forcesmentioning

confidence: 99%

Empirical Research on Corporate Governance in China: A Review and New Directions for the Future

2015

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The ownership structure of Chinese firms has experienced significant changes over the last three decades, including the development of a fast growing stock market through which a large number of domestic firms have become publicly traded corporations. These changes have drawn increasing attention from researchers of corporate governance. In this article, we review the empirical research on corporate governance in China, with a focus on the internal and external governance mechanisms that have been investigated and the findings about the effectiveness of these mechanisms. On the basis of our review of 132 studies, we summarize the major findings and discuss the limitation of agency theory in understanding the governance issue in Chinese firms. We offer several ideas (e.g., the importance of the social context, new conceptualization of governance, different outcomes of governance, and data/method issues) for a new agenda to guide future research in the corporate governance of firms operating in the Chinese and other emerging economy contexts.

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“…Owing to the present regulatory profit requirement for additional capital rising by listed companies, government owners have strong motivations to force managers to display positive earnings with little concern for audit quality (Chan et al, 2006). Additionally, contrary to other group of investors, the government holds sufficient power over the public in terms of whatever information is required from the listed companies.…”

Section: Logistic Regression Analysis Resultsmentioning

confidence: 99%

Internal corporate governance mechanisms and audit quality: Evidence from GCC region

Hassan¹,

Aljaaidi²,

Abidin³

et al. 2018

Int. j. adv. appl. sci.

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Using the suggestions of agency theory alone for predicting the auditor change behavior in the context of GCC countries is inappropriate because they were developed in countries with mature market-oriented economies. In this study, we examine the association of board of directors effectiveness (board of directors independence, size, financial expertise, meetings, nationality, international experience and CEO duality) and audit committee effectiveness (audit committee independence, size, financial expertise, meetings, nationality and international experience) with the incidence of auditor change among Gulf Cooperation Council (GCC) public listed companies for the period 2005-2010. We posit that using an integration framework of agency theory, managerial grid theory, and attractionselection-attrition has more explanatory power to predict auditor change behavior in GCC setting, taking into account economic and behavioral issues. The results show that only board of directors' effectiveness is significantly associated with the incidence of auditor change. This study finds out that the economic and the behavioral activities are related to the audit demand in the GCC. Moreover, the study suggests that regulators, especially GCC stock exchanges, should force companies to disclose all relevant information related to auditor change in a transparent and timely manner, and increase law enforcement to enhance good corporate governance practices. For companies, this study proposes that they should put more emphasis on enhancing the role and the quality of the board of directors and audit committee members, as they are involved in the decision of auditor change.

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A Political–economic Analysis of Auditor Reporting and Auditor Switches

Cited by 249 publications

References 30 publications

Determinants of Audit Opinion after the Scandals of Enron: Empirical Validation in the French Context

Determinants of Audit Opinion after the Scandals of Enron: Empirical Validation in the French Context

Empirical Research on Corporate Governance in China: A Review and New Directions for the Future

Internal corporate governance mechanisms and audit quality: Evidence from GCC region

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