Download or read book The Impact of Improved Auditor Independence on Audit Market Concentration in China written by Mark L. DeFond and published by . This book was released on 2001 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: In an effort to increase the credibility of financial information in its emerging capital markets, China recently adopted rigorous new auditing standards designed to increase auditor independence. Consistent with increased auditor independence, we find that the frequency of modified opinions increases nine-fold subsequent to the adoption of the new standards. However, the increase in modified reports is immediately followed by a large decline in audit market share among the largest auditors -- those with the greatest propensity to issue modified reports. We conjecture that this quot;flight from audit qualityquot; results from the absence of market-based incentives for Chinese managers to demand independent auditors. Our findings suggest that government regulation alone is not sufficient to create financial markets that foster auditor independence.

Download or read book When Big 4 Dominance is Broken written by Zixuan Lina Li and published by . This book was released on 2018 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2013, audit firm mergers created two “Chinese” audit firms – Ruihua and BDO Lixin – that outranked EY and KPMG to become two of the four largest audit firms in China in terms of total audit revenue. In this thesis, I examine the impact of this change in audit industry structure on the economic behavior, i.e. audit pricing and audit quality, of these two large local audit firms – or Big L – relative to the Big 4 and the other local audit firms. Using a difference-in-differences design, I find that the pre-post change in audit fees for the Big L auditors is significantly higher than that for the Big 4 and the other local audit firms around the mergers. In addition, I find that the Big L firms had a significant improvement in audit quality after the mergers, relative to the Big 4 firms over the same period. That is, holding everything else constant, the Big L had higher propensity to issue modified audit opinions and their clients exhibited improved earnings quality in the post-merger period. In contrast, I find evidence of a decline in audit fees and deterioration of earnings quality for clients of the Big 4 auditors around the mergers. I interpret the results as consistent with a shift in the relative market power among the large audit suppliers in China and the development of brand name reputations by the Big L firms, which provided the ability and incentive for the Big L firms to conduct higher quality audits in the post-merger period. On the other hand, the Big 4 audit firms lost some market power and auditor independence as new large competitors emerged in the industry. This thesis answers calls by Francis (2011) and DeFond and Zhang (2014) for further research on the effects of changes in market structure in the audit industry. Implications for various regulators, including the Ministry of Finance of PRC, the European Commission, and the U.S. SEC, are discussed.

Download or read book Aggregate Quasi Rents and Auditor Independence written by K. Hung Chan and published by . This book was released on 2015 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a sample of audit firm mergers in China's audit market, this paper provides evidence on the way auditor independence can be improved following audit firm mergers as a result of a change in the aggregate quasi rents that are exposed to risk (i.e., the quasi rents at stake). This setting allows us to examine the relationship between auditor independence and the aggregate quasi rents at stake directly after controlling for the confounding effects of auditor competence, audit firm brand name, and the self-selection problem that may exist in previous studies. We hypothesize that auditors become more independent in the post-merger period only if the mergers increase the aggregate quasi rents at stake. Proxying audit quality by the frequency of modified audit opinions (MAOs) and using a “difference-in-differences” research design, we conduct separate tests for two types of mergers under the institutional arrangements in China: one with an increase in the aggregate quasi rents at stake and the other with little change in these rents. Consistent with our hypothesis, we observe an improvement in auditor independence, but only for mergers that increase auditors' aggregate quasi rents at stake. Moreover, the post-merger increase in the propensity for MAOs in this type of merger is positively associated with the magnitude of the change in the aggregate quasi rents at stake. Our empirical findings support the theory that auditor independence is a positive function of the aggregate quasi rents at stake.

Download or read book Auditor s Responsibility and Independence written by Z. Jun Lin and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The auditor's responsibility and independence are crucial issues underlying the independent auditing function and has significant implications on the development of auditing standards and practices. Through a questionnaire survey, this study investigated auditor's responsibility and independence from the perspectives of audit beneficiaries and public practitioners in the People's Republic of China. The results reveal that the role and benefits of public accounting (independent auditing) have been positively recognized by Chinese audit beneficiaries and auditors, and there are increasing demands for expanding the applicability of public accounting in China. However this study obtained substantial evidence on the emergence of the 'expectation gap' in China, with respect to audit objectives, auditor's obligation to detect and report fraud, and third party liability of auditors. In addition, the study found that the majority of audit beneficiaries and auditors are supportive of improving auditor independence by reducing governmental control or intervention and moving towards 'self-regulation' of the profession. The causes and practical implications of the study findings are therefore analyzed contextual to the existing practices of public accounting in the changing Chinese social and economic conditions. This study should cast light on understanding of the institutional settings and updated development of independent audits in China and may also serve as an annotation to the recent accounting reform debates in the Western world.

Download or read book The Routledge Companion to Accounting in China written by Haiyan Zhou and published by Routledge. This book was released on 2018-10-10 with total page 298 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is increasing interest in accounting issues in China. Despite a relatively short history, China's stock market is the world's second largest. This growth has been accompanied by increasing demand for accounting information alongside reforms of accounting and auditing rules, as international investors have paid increasing attention to investment opportunities in this dynamic and energetic country with a large population and economic growth potentials. Despite this, at present there are few books which offer students, academics and practitioners a comprehensive guide to current accounting issues in China. The Routledge Companion to Accounting in China fills this important gap in the literature. The volume is organized in six thematic sections which cover capital market and corporate finance, financial accounting, managerial accounting, auditing, taxation and internal controls. The structure is intended to reflect the increasing diversity of contemporary accounting issues in China, including a balanced overview of current knowledge, identifying issues and discussing relevant debates. This book is a prestigious reference work which offers students, academics and practitioners an introduction to current accounting issues in the emerging market of China.

Download or read book The Future of Chinese Management written by Malcolm Warner and published by Routledge. This book was released on 2004-11-23 with total page 229 pages. Available in PDF, EPUB and Kindle. Book excerpt: The papers that comprise this study examine the ongoing state of management reforms in the People's Republic of China. The contributors explain how and why these reforms came about and where they are heading.

Download or read book Why Big 4 Accounting Firms Did Not Dominant China s Stock Market as They Did Elsewhere written by and published by . This book was released on 2015 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Big 4 accounting firms (PriceWaterhouseCoopers, KPMG, Deloitte and Ernst Young) are dominating the audit markets in the U.S., European Union, Japan and theoretically every major capital market EXCEPT China. As of March 2015, there were around 86% of public companies listed in the New York Exchange (NYSE) as audited by the Big 4, while only 6% of the public companies listed in the Shanghai and Shenzhen Exchange as Big 4's audit clients. To understand this phenomenon, this thesis studies the problem not only from an auditor's selection perspective but the audit firms' client acceptance and continuance decision. Moreover, the regulatory environmental development was also discussed to better consolidate relevant factors that contributed to the formation of current auditing market landscapes in China. With respect to conventional auditor selection theories like agency theories by Jensen and Meckling (1976)1, this thesis argued that managers of Chinese listed companies exercised heavy influence in the auditor selection process, resulting in reverse selection problems in auditor selection. The Big 4 accounting firms, on the other hand, enjoy fabulous auditing fee premiums from auditing market segments involving overseas investors/stakeholders because of their unique reputation. However, this fact limits their incentives to expand business to less lucrative market segments. The auditing regulatory environment was also becoming unfavorable to the Big 4 Accounting firms in recent years. This thesis is constructed as below: First, there is an introduction to Big N accounting firms and their global presence. Second, the characteristics of listed companies in China's stock market and the development of accounting and auditing industry in China were elaborated. The third part is specifically addressed to the Big 4 accounting firms and their development in China over the decades since their establishment in 1992. Later we review the current literatures regarding auditor selection, client acceptance and continuance decisions in the third part, and use these frameworks to develop our answers to topic questions in the fourth part. As the conclusion, the fifth part summarizes the arguments developed in the fourth part and addresses the limitations of this thesis. The purpose of this thesis is to form an understanding concerning the question why Big 4 Accounting firms did not dominant China's stock market as they had done in most of the developed markets. Based on these findings, Chinese policy makers may want to improve the corporate governance of the listed companies, especially in those areas related to the independence of auditing committees, if the government wish to improve their overall audit quality provided to domestic listed companies.

Download or read book Research in Accounting Regulation written by Gary Previts and published by Elsevier. This book was released on 2004-09-17 with total page 347 pages. Available in PDF, EPUB and Kindle. Book excerpt: The scope of service provided by professional accountants is influenced by legislation and case law as well as the dictates of a variety of government and private sector agencies: including State Boards of Accountancy, Academic Accreditation Bodies, the United States Securities and Exchange Commission, the Public Company Accounting Oversight Board, independent standard setting bodies such as the Federal Accounting Standards Advisory Board (US), the Financial Accounting Standards Board (US), the International Accounting Standards Board and self-regulatory organizations such as State Societies of CPA and the American Institute of Certified Public Accountants. There are equivalent and emerging local international bodies that exist in most developed countries. It is important for academics, students, practitioners, regulators and researchers to consider, study and understand the role and relationship of such bodies with the practice and content of our discipline.Research in Accounting Regulation is a refereed annual serial that seeks to publish high quality manuscripts, which address regulatory issues and policy affecting the practice of accountancy, broadly defined. Topics of interest include research based on: 1) Self-regulatory activities. 2) Case law and litigation. 3) Governmental and quasi-governmental regulation. 4) The economics of regulation, including modelling.This research series aims to encourage the submission of original empirical, behavioural or applied research manuscripts that consider strategic and policy implications for regulation, regulatory models and markets. It is intended for individual researchers, practitioners, regulators and students of accountancy who desire to increase their understanding of the regulation of accountancy.

Download or read book The Routledge Handbook of Accounting in Asia written by Zhijun Lin and published by Routledge. This book was released on 2017-08-16 with total page 631 pages. Available in PDF, EPUB and Kindle. Book excerpt: As the centre of world economic development has shifted towards Asia over the last two decades, many Asian countries have witnessed rapid growth in economic and business operations. In light of these recent changes, accounting has played a significant role in assisting economic transition and advancement in Asian countries. However, although the general trend over recent decades towards convergence in financial reporting standards and practices has dramatically improved the comparability of accounting information, considerable variances remain in practices between countries. This Handbook therefore provides an up-to-date review of contemporary accountancy across Asia, illustrating how standards have been reshaped to accommodate the needs of economic and social trends. As well as providing an overview of standards in the larger Asian economies of China, India and Japan, contributions to the Handbook also include studies of countries such as Sri Lanka, Nepal, Cambodia and Mongolia. In particular, this Handbook analyses: financial accounting and reporting management accounting auditing and accounting professionalization governmental and public-sector accounting accounting education accounting development in Asian emerging economies The Routledge Handbook of Accounting in Asia offers students, academics, regulators and practitioners an essential reference guide to the current scholarship and practice in the field of accountancy in Asia. It will be a useful resource in particular for students of accountancy, business studies and Asian studies.

Download or read book Complex Systems and Sustainability in the Global Auditing Consulting and Credit Rating Agency Industries written by Nwogugu, Michael I. C. and published by IGI Global. This book was released on 2021-05-07 with total page 320 pages. Available in PDF, EPUB and Kindle. Book excerpt: Current and future issues in the global accounting/consulting, business opportunity, and credit rating agency (CRA) industries can have significant multiplier-effects on international trade, sustainable growth, and compliance (as physical phenomena). These three industries are among the most international and human-capital-intensive of all service industries. In these industries, analysis of business models and industry dynamics can provide insights about how human-computer interaction (HCI) and contract theory affect the evolution of financial market ecosystems and cross-border information flows, and how business models, work-allocation mechanisms, and liability allocation can evolve to manage change. An often-overlooked issue is that non-performing loans (NPLs), sustainability, and CRA efficiency can be significantly affected by business processes, corporate strategy, and HCI in industry ecosystems, multinational corporations (MNCs), and economic systems. Complex Systems and Sustainability in the Global Auditing, Consulting, and Credit Rating Agency Industries compares these three industries and introduces theories of public policy and “inter-business” processes. The book links industry structure, complex systems (including networks), behavioral game theory, structural changes, and antitrust problems to sustainability and the efficiency of pollution-remediation systems. The book introduces new “informal algorithms” and business/resource-allocation models that solve social-choice problems, and also contravene “impossibility theorems” that are at the core of modern computer science and mechanism design. This book is essential for professors and masters/PhD-level students and employees (in industry, financial services, research institutes, consulting firms, and government agencies) who are interested in industrial mathematics and theoretical computer science.

Download or read book Handbook of Business Practices and Growth in Emerging Markets written by Satyendra Singh and published by World Scientific. This book was released on 2010 with total page 577 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Handbook of Business Practices and Growth in Emerging Markets consists of a collection of specially commissioned chapters that describe the current business environment, organizational culture, consumer behavior, financial investment climate, and examples of best prevailing practices in emerging markets. It covers all the major functional areas of business OCo marketing, strategy, operations and finance OCo in all continents. The focus of each chapter is on the identification of different business issues in different emerging markets (including Asia, Africa and South America) and on the implementation of a proposed set of recommendations, using both qualitative and quantitative techniques to assist in decision-making and in improving organizational efficiency and effectiveness. Readers will also appreciate the multidimensional view of financial and non-financial performance measurement of businesses. Specifically, the goal of this research-based handbook is to provide a comprehensive guide for business students and managers by discussing a range of issues from the diverse emerging markets and enabling them to develop a strategic mindset for a market-oriented culture. Given the changing business dynamics, government policies and demands in industries, this handbook is both timely and topical. Sample Chapter(s). Foreword (28 KB). Chapter 1: Introduction (69 KB). Contents: Introduction (S Singh); China: New Product Development in Emerging Markets (N Grigoriou); Competing with Multinationals: Entry and Evolution of Latecomer Firms in China''s Handset Industry (W Xie & S White); Current Business Practices of Top Fortune Global Emerging Multinationals (C-H Liu & K-K Wei); Between Information System Integration and Performance, What are the Missing Links? (R P Lee & Q-M Chen); Legal Cases and Auditing in China (G Chong); Commonwealth of Independent States: CSR in the Emerging Market of Russia: Finding the Nexus Between Business Accountability, Legitimacy, Growth and Societal Reconciliation (O Kuznetsova); The Russian System of Corporate Governance: Promises and Realities (O Kuznetsova); Brand Management in Emerging Markets: Private Labels in Croatian Grocery Retailing and the Case of Dona Trgovina D O O (M Martinovic & J Branch); Baltic Tiger or Wounded Lion OCo Retail Trade and Shopping Behavior in Estonia, Latvia, and Lithuania (B McKenzie); Latin America: Data Mining as a Decision Tool for Materials Procurement in a Multinational Company Headquartered in Brazil (D C C Barbosa et al.); The Importance of Natural Resources-Based Industry Clusters in Latin America: The Case of Chile (C Felzensztein); Inserting Small Holders into Sustainable Value Chains (M F Neves & L T e Castro); Franchise as an Efficient Mode of Entry in Emerging Markets: A Discussion from the Legitimacy Point of View (C Gauzente & R Dumoulin); Africa: Public Procurement Reform in Emerging Economies: A Case Study of Kenya (P M Lewa & S K Lewa); Rural Tourism in South Africa: The Case of Damdoryn and Bufflespoort (K P Quan-Baffour); An Institutional Network Approach of Partnership Mode of Interest-Free Microfinance and Islamic Banking: A Case Study (M N Alam & M M Hussain); Challenges of Internet Adoption of Banks in Ghana (N O Madichie et al.); Middle East: Does the Religious Nature of Organizations Affect Performance Measurement? A Case of GCC Banks (E K A Mohamed & M M Hussain); Challenges and Opportunities for International Marketers in Kuwait (C P Rao); Glimpses at Society and Management in Iran (H Yeganeh); Internet Consumer Behavior in Cyprus (A Thrassou et al.); Asia: Corporate Social Performance of Indonesian State-Owned and Private Companies (H Fauzi et al.); Does Individual Stock Futures Affect Stock Market: Volatility in India? (N Tripathy et al.); Philippines in the 21st Century: Business Opportunities and Strategic Marketing Implications (E P Garrovillas); Papua New Guinea OCo An Emerging Economy in the South Pacific: Challenges and Prospects (R Rena); Conclusion (S Singh). Readership: Students of business administration courses which focus on organizational culture, managers and management consultants dealing with issues related to emerging markets."

Download or read book Ethical Reasoning in Accounting and Auditing written by Lawrence A. Ponemon and published by . This book was released on 1993 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Increasing Auditors Competence written by Yanting Shi (S.M.) and published by . This book was released on 2013 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the competence and independence of Chinese auditors. I find significant positive correlation between the modified audit opinions (MAOs) of China A-share companies from 2002 to 2011 and parameters of the clients' company-level control risks, auditor changes, and relative client importance. The evidence indicates that Chinese auditors generally demonstrate competence and independence. I argue that with the "Special Treatment" (ST) regulation, the audit quality of Chinese auditors remains satisfactory; without the ST regulation, the audit quality of Chinese auditors deteriorates. I use the regression results to substantiate that the audit failures of cross-listed Chinese companies occur because of the unavailability of the ST regulation, since the ST regulation has helped to improve the competence of auditors in China. Finally, I analyze the audit quality of "Big Four" affiliate companies in China, and find that the "Big Four" in China do not exhibit higher audit quality compared to local Chinese auditing firms. In fact, the quality of the "Big Four" auditing firms equals that of their non-"Big Four" peers..

Download or read book Capitalizing China written by Joseph P. H. Fan and published by University of Chicago Press. This book was released on 2013 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: La 4e de couverture indique : "Despite a vast accumulation of private capital, China is not embracing capitalism. Deceptively familiar capitalist features disguise the profoundly unfamiliar foundations of "market socialism with Chinese characteristics." The Chinese Communist Party (CCP), by controlling the career advancement of all senior personnel in all regulatory agencies, all state-owned enterprises (SOEs), and virtually all major financial institutions state-owned enterprises (SOEs), and senior Party positions in all but the smallest non-SOE enterprises, retains sole possession of Lenin's Commanding Heights. The chapters in this volume examine China's high savings rate, banking system, financial markets, financial regulations, corporate governance, and public finances; and consider policy alternatives the CCP might consider if its goal is China's elevation into the ranks of high income countries."

Download or read book The China Miracle written by Justin Yifu Lin and published by The Chinese University of Hong Kong Press. This book was released on 2004-03-15 with total page 432 pages. Available in PDF, EPUB and Kindle. Book excerpt: The tremendous success of China's economic reform, in contrast with the vast difficulties encountered by the former Soviet Union and Eastern European countries in their transition, has attracted worldwide attention. Using a historical, comparative and analytic approach grounded in mainstream economics, the authors develop a consistent and rational framework of state-owned enterprises and individual agents to analyze the internal logic of the traditional planning system. They also explain why the Chinese economy grew slowly before the market-oriented reform in 1979 but became one of the fastest growing economies afterwards, and why the vigour/chaos cycle became part of China's reform process. The book also addresses to the questions that whether China can continue its trend of reform and development and become the largest economy in the world in the early 21st century, and what the general implications of China's experience of development and reform are for other developing and transition economies. The first edition has been well-received and is the standard textbook or reference for students and researchers of China studies. In this thoroughly revised edition, the authors have updated the data and information in the book and include a new chapter on the impact of China's WTO accession on its economic reforms and causes of the current deflation.

Download or read book Political Economy Client Economic Importance and Auditor Independence written by Ferdinand A. Gul and published by . This book was released on 2007 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that politically connected non-Big 4/5 auditors are associated with lower levels of audit quality (proxied by the level of abnormal non-core earnings and the proportion of modified audit opinions) than firms with no political connections. We also show that more economically important clients are associated with lower levels of audit quality. This result is in contrast to US evidence that client economic importance is not significantly associated with Big 4 auditor independence because of the need to protect auditor reputation. Further analysis shows that the negative association between political connections and audit quality is stronger for more economically important clients. Using a smaller data set, we show that the relationships we document initially become weaker after the introduction of the Auditor Disaffiliation Program which suggests an overall improvement in auditor independence after the program, ceteris paribus.

Download or read book On Informal Institutions and Accounting Behavior written by Xingqiang Du and published by Springer Nature. This book was released on 2021-01-04 with total page 506 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book focuses on the Chinese context to investigate how informal institutions (Confucian culture and its dimensions, religion, political connections) in China affect accounting behaviors. This book tries to show that cultural influence and religious impacts in China are not trivial and increasingly important, and specifically, informal institutions have its bright and dark sides with regard to its effects on accounting behaviors. This book aims to investigate whether and how informal institutions (Confucian culture and its dimensions, religion, political connections) affect micro-level accounting behaviors, including but not limited to audit quality, financial misstatement, R&D, corporate misconducts, corporate philanthropy and corporate environmental responsibility. This book provides graduate students, scholars and practitioners in the fields of accounting, business administration and religion with an in-depth understanding about how informal institutions as a set of social norms affect micro-level accounting behaviors. First, this book is the first to focus on the Chinese context and investigate the effects of informal institutions on accounting behavior. Second, this book documents systematic evidence to show the bright and dark sides with regard to the relation between informal institutions and accounting behavior in China. Lastly, this book reveals informal institutions can serve as an important mechanism to affect accounting behaviors.