Auditor Choice and Accruals Patterns of Cross-Listed Firms

ISBN-13: 9783659571817 / Angielski / Miękka / 2014 / 52 str.

Xin Qingquan;Wang Bing

Opis

This study investigates whether the accrual patterns differ between two groups of Chinese firms cross-listed in Hong Kong: those employing Big4 vs. those employing non-Big 4. The evidence suggests that clients of Big 4 auditors report less unsigned discretionary accruals relative to clients of non-Big 4 auditors. Further, cross-listed firms with non-Big 4 auditors are more likely to understate their earnings and experience larger reversals of accruals in the future than cross-listed firms with Big 4 auditors. The findings suggest Big 4 auditors play a meaningful role in improving earnings quality for cross-listed firms, which help explain why cross-listed firms have higher earning quality than their domestic counterparts documented by prior literature. This Study addresses an interesting and important research question.

O autorze

Qingquan Xin is a Professor of Accounting at the school of Economics and Business Administration of the Chongqing University. Professor Xin s primary research interests include corporate governance and accounting information in capital markets.