Accounting fraud, auditing, and the role of government sanctions in China

Lisic, Ling Lei; Silveri, Sabatino; Song, Yanheng; Wang, Kun

doi:10.1016/j.jbusres.2014.11.013

Cited by 97 publications

(82 citation statements)

References 41 publications

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“…Following DeAngelo (1981), numerous empirical studies find evidence suggesting that Big4 auditors provide higher quality audit information compared to Non-Big4 auditors (Becker et al, 1998;Khurana & Raman, 2004;Behn et al, 2008). Furthermore, organisations audited by large audit firms (Top 10 in China) are less likely to commit financial statement fraud (Lisic, Silveri, & Song, 2015). The literature provides three reasons why Big4 accounting firms have higher audit quality compared to Non-Big4.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

Mandatory Audit Firm Rotation and Big4 Effect on Audit Quality: Evidence from South Korea

Choi¹,

Lim²,

Mali³

2017

AAMJAF

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Section: Hypothesis Developmentmentioning

confidence: 99%

Mandatory Audit Firm Rotation and Big4 Effect on Audit Quality: Evidence from South Korea

Choi¹,

Lim²,

Mali³

2017

AAMJAF

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“…According to the fraud triangle theory, if the company gets pressure, such as low profitability, it encourages companies to commit financial statements fraud, so the company provides a positive signal to investors and the other stakeholders. The relationship between profitability and financial statements fraud is shown by several studies including another research of Zainudin and Hashim (2016) in Malaysia between 2007 and 2013, and research by Lisic, et al (2014) in China, which shows that profitability is negatively related to the level of financial statements fraud. This result has been in line with the fraud triangle theory that the lower the profitability, the more pressure the company will encourage financial report fraud.…”

Section: Profitabilitymentioning

confidence: 96%

“…An independent audit aims to provide assurance that financial statements are clear of fraud or material errors. Therefore, a huge audit company will provide higher audit quality (Lisic, et al, 2014). According to Salem (2012), the auditors will protect and maintain their reputation and professional integrity to avoid legal fees.…”

Section: Introductionmentioning

confidence: 99%

Relationship between Financial Ratio and Financial Statement Fraud Risk Moderated by Auditor Quality

Izzalqurny

Subroto²,

Ghofar³

2019

IJRBS

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This study was aimed to prove the research hypothesis that there are effects of financial ratios, which consist of profitability, leverage, and liquidity on the financial statements fraud risk, and the quality of auditors are able to moderate the relationship between financial ratios to financial statements fraud. This study uses a population of manufacturing companies that publish their financial statements on the Indonesian Stock Exchange in 2016-2017 will also be summarized and inferred. This study uses purposive sampling so that the study sample amounted to 275 firm years. The dependent variable uses the financial statements fraud risk with the proxy Dechow F-score. The independent variable in this study consisted of profitability with ROA ratio, leverage using the calculation of the ratio of total liabilities to total assets, and liquidity using the calculation of the ratio of total current assets to current liabilities. The moderating variable in this study is auditor quality as a moderating variable with a dummy variable. The Hypothesis test conducted is using moderated regression analysis (MRA). The results of this study indicate that the financial statements fraud risk is influenced by financial liquidity ratios, while financial ratios of profitability and leverage have not been proven to affect financial report fraud. This study provides a contribution by providing evidence that the quality of auditors can suppress fraudulent actions on financial statements with low profitability. This research provides information to regulators to pay more attention to companies that experience liquidity problems, and become input for regulators to make rules that improve the quality of auditors.

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“…3 Prior accounting studies Bonner, Palmrose andYoung (1998), Schmidt (2012), Lisic, L.L., S.D. Silveri, Song and Wang (2015).…”

Section: Asian Economic and Financial Reviewmentioning

confidence: 99%

The Causes and Economic Consequences of Patent Litigation

Wang

Chen

2017

Asian Economic and Financial Review

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Accounting fraud, auditing, and the role of government sanctions in China

Cited by 97 publications

References 41 publications

Mandatory Audit Firm Rotation and Big4 Effect on Audit Quality: Evidence from South Korea

Mandatory Audit Firm Rotation and Big4 Effect on Audit Quality: Evidence from South Korea

Relationship between Financial Ratio and Financial Statement Fraud Risk Moderated by Auditor Quality

The Causes and Economic Consequences of Patent Litigation

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