Auditors' Going Concern Reporting in the Pre- and Post-Bankruptcy Law Eras: Chinese Affiliates of Big 4 versus Local Auditors

Xi Wu (Participant Author), Oliver Meng Rui, Phyllis L.L. Mo

科研成果: 期刊稿件期刊论文

摘要

Unlike the situation in most developed countries, before the enactment of China's 2006 Bankruptcy Law it was difficult for Chinese-listed companies, which were mostly government owned, to declare bankruptcy. Our analysis of a sample of Chinese financially-distressed companies from 2001 to 2010 reveals that the Chinese affiliates of Big 4 auditors had a higher propensity to issue going concern (GC) reports than local auditors not only in the post-law period, but also in the pre-law period. This finding suggests that Big 4 auditors had incentives to maintain their reputations even when the clients' bankruptcy risk was low. We also find that there was a significant increase in local top-10 auditors' GC reporting propensity in the post-law period, which is consistent with the notion that the increased litigation/regulation risk due to the enactment of Bankruptcy Law has an effect on local large auditors.
源语言英语
页(从-至)1-30
期刊The International Journal of Accounting
50
1
DOI
出版状态已出版 - 2015

Corresponding author email

xi.wu@cufe.edu.cn

关键词

  • Bankruptcy Law
  • Chinese affiliates of Big 4 auditors
  • Going concern opinions
  • Local auditors

成果物的来源

  • ABDC-A
  • Scopus

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