Audit Quality And Earnings Management: Evidence From Shanghai Stock Market In China

Journal of Applied Business Research (JABR)

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Field Value
Title Audit Quality And Earnings Management: Evidence From Shanghai Stock Market In China
Creator Rhee, Chang Seop
Rhee, Hyunjung
Li, Zhenbo
Subject Audit Quality
Earnings Management
Big Audit Firms
Shanghai Stock Market
Description The prior studies report that the global big4 audit firms (Big4) generally provide higher quality audit services compared to the local audit firms, but inconsistent result on audit quality of the Big4 audit firms was observed in the Chinese stock market. We believe that it may be not appropriate to distinguish high or low audit quality as separating the Big4 and non-Big4 because the market share of the Big4 and non-Big4 on Shanghai stock market is considerably lower than that of other countries. Therefore, we use the measure of Chinese big10 audit firms (Big10) as higher audit quality and examine the association with the level of earnings management using the sample of Shanghai Stock Market listed companies in China. From the empirical tests, we find that the Big10 provide better audit service to prevent their clients’ earnings management than non-Big10 audit firms. The finding of this study demonstrates the Big10 provide differentiated audit service from non-Big10 audit firms on Shanghai stock market in China.
Publisher Clute Institute
Date 2021-09-01
Type info:eu-repo/semantics/article
Format application/pdf
Source Journal of Applied Business Research (JABR); Vol. 37 No. 5 (2021); 129-138
Language eng

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