State Control, Entrepreneurship and Resource Allocation

Chu, Son Ngoc; Song, Ligang

doi:10.22459/drcltgd.07.2014.04

Cited by 1 publication

(1 citation statement)

References 14 publications

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“…As noted earlier, institutional voids and corruption have accompanied China's economic transition. In such a setting, profit‐minded businesspeople are likely to spot institutional loopholes and exploit rent‐seeking opportunities generated by changing institutions (Chu and Song [2014]). Such rent‐seeking activities range from bribing government officials to gain advantages in doing business to stealing assets that are transferred from public to private hands (Cai, Fang, and Xu [2011], Bai, Hsieh, and Song [2014], Fisman and Wang [2014]).…”

Section: Background Of Research and Hypothesesmentioning

confidence: 99%

Public Attention and Auditor Behavior: The Case ofHurun Rich Listin China

Qing

2020

J of Accounting Research

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Adverse client publicity can entail regulatory scrutiny over audited financial statements and impose political costs on auditors. We use the changes in client publicity caused by their controlling owners' presence on the Hurun Rich List (the rich listing) in China to test the hypothesis that auditor conservatism increases with client publicity. Our evidence indicates auditors issue more adverse audit opinions to clients and charge higher fees following the rich listing events. Moreover, we observe that auditors strategically respond to clients with different attributes-for clients whose owners accumulated wealth in a more questionable manner, auditors choose more stringent audit reporting to better defend themselves from regulatory scrutiny; for clients without such attributes, auditors primarily rely on increasing audit fees to cope with any post-listing increase in audit risks. Our analyses also suggest the impacts of rich listings tend to be concentrated among large audit firms with stronger reputation concerns or among engagement auditors with more conservative reporting styles. By showing how auditors manage political risks associated with heightened public scrutiny, we contribute to both the auditing and political cost literature. JEL codes: D72; L82; L84; M42

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Section: Background Of Research and Hypothesesmentioning

confidence: 99%

Public Attention and Auditor Behavior: The Case ofHurun Rich Listin China

Qing

2020

J of Accounting Research

View full text Add to dashboard Cite

show abstract

State Control, Entrepreneurship and Resource Allocation

Cited by 1 publication

References 14 publications

Public Attention and Auditor Behavior: The Case ofHurun Rich Listin China

Public Attention and Auditor Behavior: The Case ofHurun Rich Listin China

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