Chen, Xinxian, Chen, Jean Jinghan, Xiao, Jason Zezhong (2024) Do social ties between two signatory auditors affect audit quality and firm value? Accounting and Business Research, . pp. 1-36. ISSN 0001-4788. E-ISSN 2159-4260. (doi:10.1080/00014788.2024.2306531) (Access to this publication is currently restricted. You may be able to access a copy if URLs are provided) (KAR id:105151)
PDF
Author's Accepted Manuscript
Language: English Restricted to Repository staff only until 20 March 2026.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
|
|
Contact us about this Publication
|
|
Official URL: https://doi.org/10.1080/00014788.2024.2306531 |
Abstract
We explore the effects of social ties (including alumni relations, regional connections and employment affiliation) between the two signatory auditors (engagement and review auditors) on audit quality in China. We find that client firms with socially connected auditors have lower audit quality. The negative effect is more pronounced when the two signatory auditors are partners in their audit firms or when financial irregularities exist in their client firms. Conversely, this adverse effect is alleviated if the two auditors have attended elite schools or work for one of the Big 4 audit firms. We further find that social ties between the two auditors is negatively associated with firm value through impaired market confidence, while this negative relationship can be partially explained by impaired audit quality. Overall, our results indicate that the costs of the two signatory auditors’ social ties outweigh their benefits.
Item Type: | Article |
---|---|
DOI/Identification number: | 10.1080/00014788.2024.2306531 |
Uncontrolled keywords: | Accounting, Finance |
Subjects: |
H Social Sciences > HF Commerce > HF5351 Business H Social Sciences > HF Commerce > HF5601 Accounting H Social Sciences > HG Finance |
Divisions: | Divisions > Kent Business School - Division > Department of Accounting and Finance |
Funders: | National Natural Science Foundation of China (https://ror.org/01h0zpd94) |
Depositing User: | Jean Chen |
Date Deposited: | 28 Feb 2024 12:48 UTC |
Last Modified: | 19 Mar 2024 09:29 UTC |
Resource URI: | https://kar.kent.ac.uk/id/eprint/105151 (The current URI for this page, for reference purposes) |
- Export to:
- RefWorks
- EPrints3 XML
- BibTeX
- CSV
- Depositors only (login required):