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Individual Auditor Conservatism After CSRC Sanctions
This study examines whether sanctions imposed by the China Securities Regulatory Commission (CSRC) against individual auditors result in greater auditor conservatism. Using a difference-in-differences research design, we find that clients of sanctioned individual auditors have lower discretionary ac...
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| Published in: | Journal of business ethics 2016-06, Vol.136 (1), p.133-146 |
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| Main Authors: | , , |
| Format: | Article |
| Language: | English |
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| cites | cdi_FETCH-LOGICAL-c402t-507cf723ace5f882986fbb3f8ac1e2ecf02411b3d7d9fb08fd06895efb4c48ef3 |
| container_end_page | 146 |
| container_issue | 1 |
| container_start_page | 133 |
| container_title | Journal of business ethics |
| container_volume | 136 |
| creator | Sun, Jerry Cahan, Steven F. Xu, Jing |
| description | This study examines whether sanctions imposed by the China Securities Regulatory Commission (CSRC) against individual auditors result in greater auditor conservatism. Using a difference-in-differences research design, we find that clients of sanctioned individual auditors have lower discretionary accruals in the post-sanction period than in the pre-sanction period when compared to a matched control group of clients audited by individual auditors who were not sanctioned. Our findings suggest that sanctions imposed by the CSRC on individual auditors can lead to improvements in audit quality by increasing the conservatism of the sanctioned auditors. That is, individual auditors are more likely to resist their clients' income-increasing accounting manipulations after being sanctioned by the CSRC. |
| doi_str_mv | 10.1007/s10551-014-2514-z |
| format | article |
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Using a difference-in-differences research design, we find that clients of sanctioned individual auditors have lower discretionary accruals in the post-sanction period than in the pre-sanction period when compared to a matched control group of clients audited by individual auditors who were not sanctioned. Our findings suggest that sanctions imposed by the CSRC on individual auditors can lead to improvements in audit quality by increasing the conservatism of the sanctioned auditors. That is, individual auditors are more likely to resist their clients' income-increasing accounting manipulations after being sanctioned by the CSRC.</description><subject>Accounting</subject><subject>Audit quality</subject><subject>Audited financial statements</subject><subject>Auditing</subject><subject>Auditing standards</subject><subject>Auditors</subject><subject>Audits</subject><subject>Business and Management</subject><subject>Business audits</subject><subject>Business Ethics</subject><subject>China</subject><subject>Clients</subject><subject>Conservatism</subject><subject>Control groups</subject><subject>Economic sanctions</subject><subject>Education</subject><subject>Ethics</subject><subject>Exposure drafts</subject><subject>Financial accounting</subject><subject>Financial audits</subject><subject>Fiscal 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against individual auditors result in greater auditor conservatism. Using a difference-in-differences research design, we find that clients of sanctioned individual auditors have lower discretionary accruals in the post-sanction period than in the pre-sanction period when compared to a matched control group of clients audited by individual auditors who were not sanctioned. Our findings suggest that sanctions imposed by the CSRC on individual auditors can lead to improvements in audit quality by increasing the conservatism of the sanctioned auditors. That is, individual auditors are more likely to resist their clients' income-increasing accounting manipulations after being sanctioned by the CSRC.</abstract><cop>Dordrecht</cop><pub>Springer</pub><doi>10.1007/s10551-014-2514-z</doi><tpages>14</tpages></addata></record> |
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| ispartof | Journal of business ethics, 2016-06, Vol.136 (1), p.133-146 |
| issn | 0167-4544 1573-0697 |
| language | eng |
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| source | EBSCOhost Business Source Ultimate; International Bibliography of the Social Sciences (IBSS); Art, Design and Architecture Collection; ABI/INFORM Archive; Social Science Premium Collection; ABI/INFORM Global; Politics Collection; PAIS Index; Springer Link; JSTOR Archival Journals |
| subjects | Accounting Audit quality Audited financial statements Auditing Auditing standards Auditors Audits Business and Management Business audits Business Ethics China Clients Conservatism Control groups Economic sanctions Education Ethics Exposure drafts Financial accounting Financial audits Fiscal restraint Industry Investments Litigation Management Philosophy Quality of Life Research Regression analysis Regression coefficients Regulatory agencies Research design Sanctions Securities Securities markets Securities Regulatory Commission-China Variable coefficients |
| title | Individual Auditor Conservatism After CSRC Sanctions |
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