The existing literature on audit opinion shopping provides inconsistent evidence on whether such shopping has any association with abnormal audit fees. In this paper, we hypothesize that firms engage in audit opinion shopping and pay an abnormal audit fee only when their degree of accounting...

This study explores the level of unconditional conservatism (UNCC) in accounting after China's convergence with International Financial Reporting Standards (IFRS). Using the intercept of the Basu (1997) model, an overall reduction is found in UNCC under the Chinese version of IFRS. This study is...

There has been a steady growth of goodwill impairments in the Chinese stock market since the adoption of the impairment approach in accounting. The influence of goodwill impairments on a firm's financial position and profitability give reason to doubt its current and future performance. We...

We present a framework and empirical evidence to explain why, on average, 11% of listed firms in China received modified audit opinions (MAOs) between 1992 and 2009. We argue that there are two reasons for this phenomenon: strong earnings management incentives lower firms' financial reporting...

Using listed companies in China's A-share market from 1997 to 2009, this paper investigates the relationship between controller changes (including changes in controlling shareholders, directors and CEOs) and auditor changes. The empirical evidence indicates that controller changes are positively...

Since its foundation, China's government auditing system has played a very important role in maintaining financial and economic order and improving government accountability and transparency. Though a great deal of research has discussed the role of government auditing in discovering and...

This paper focuses on the reform of accounting standards in China in 2007 and investigates its impact on equilibrium pricing in the audit market. We find that the concentration of the audit market and the probability of issuing modified audit opinions do not significantly change, but that audit...

This study examines whether auditors are employed as a monitoring mechanism to mitigate agency problems arising from different types of controlling shareholders. In a context of concentrated ownership and poor investor protection, controlling shareholders can easily expropriate wealth from...