Audit Quality for US-listed Chinese Companies

Chien Minh Dang; Neil Fargher; Gladys Lee

doi:10.1111/ijau.12085

Audit Quality for US-listed Chinese Companies

Chien Minh Dang, Neil Fargher^*, Gladys Lee

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

9 Citations (Scopus)

Abstract

PCAOB Staff Audit Practice Alert No. 6 raised concerns regarding the quality of audit reports on financial statements filed by issuers with substantially all of their operations outside of the US. An area of specific concern is the audit of companies with operations predominantly based in mainland China. Using a sample of Chinese companies listed in the US, we examine whether measures of audit quality are affected by the location of the auditor. We find some evidence of higher levels of discretionary accruals when a US-listed Chinese firm is audited by a small US auditor.

Original language	English
Pages (from-to)	150-163
Number of pages	14
Journal	International Journal of Auditing
Volume	21
Issue number	2
DOIs	https://doi.org/10.1111/ijau.12085
Publication status	Published - Jul 2017

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10.1111/ijau.12085

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Audit Quality for US-listed Chinese Companies

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