CN EN
Advanced

Foreign ownership and auditor choice

Indexed by

SSCI Scopus ABDC-A

Abstract

We take advantage of the unique institutional background of the B-share stock market in China to explore the impact of foreign investors on auditor choice. Our results show that the percentage of B-share firms audited by Big 4 auditors has decreased with both economic and statistical significance since the segmented B-share market was opened to domestic investors in 2001. We find that the negative effect of opening the B-share market on demand for high audit quality is more pronounced for firms with greater decreases in foreign ownership and for firms with strong incentives to be opaque, such as those in a weak institutional environment, firms with more “other receivables,” firms with more related-party transactions, and firms with political connections. Additional analysis shows that our results are not driven by the concurrent decline in capital-raising activities in the B-share market.

Keyword

Author Community

[He, Xianjie ; Zhu, Hongjun] Shanghai Univ Finance & Econ, Shanghai, Peoples R China

[Rui, Oliver] China Europe Int Business Sch, Shanghai, Peoples R China

[Zheng, Liu] City Univ Hong Kong, Hong Kong, Hong Kong, Peoples R China


Related Article

Source

Journal of Accounting and Public Policy

ISSN:0278-4254

Year:2014

Issue:4

Volume:33

Page:401-418

Powered by JCR@2014

ESI Discipline:ECONOMICS & BUSINESS;

Cited Count
W
Loading... 19
C
Loading...
Get Fulltext
Rights and Licenses
Related Keywords
Communities & Collections
Access Stats
Creative Commons Licence
The content of CEIBS Research Online is licensed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND 4.0).