Secrecy culture, client importance, and auditor reporting behavior: an international study

IF 2.8 3区 管理学 Q2 BUSINESS, FINANCE
Brian M. Lam, Phyllis Lai Lan Mo, Md Jahidur Rahman
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引用次数: 0

Abstract

Purpose

This study aims to investigate whether auditors compromise their independence for economically important clients in countries with a secrecy culture.

Design/methodology/approach

The authors empirically examine the research question based on a data set of 33 countries for the period from 1995 to 2018. The dependent variable is the auditors’ propensity to issue modified audit opinions, which is a proxy for auditor independence. The authors use relative client size as a proxy for client importance. The authors adopt the Heckman (1979) two-stage model to mitigate the potential endogeneity issue involved in the selection of Big-N auditors.

Findings

Using a large sample of firms and controlling for the firm- and country/region-level factors, this study reveals that both Big-N and non-Big-N auditors are more likely to issue modified audit opinions to clients located in countries with a strong secrecy culture relative to those located in other countries. However, Big-N auditors are more likely to issue modified audit opinions for their economically important clients with a secrecy culture relative to their other clients, while no or weaker evidence is found for non-Big-N auditors. The results are consistent and robust to endogeneity tests and sensitivity analyses.

Originality/value

This study enriches the literature by providing a new perspective on auditor independence that an auditor’s reporting behavior can vary depending on the client’s importance and auditor type, even under the same secrecy culture.

保密文化、客户重要性与审计师报告行为:一项国际研究
目的本研究旨在调查在具有保密文化的国家中,审计师是否会为经济上重要的客户损害其独立性。设计/方法/途径作者根据 1995 年至 2018 年期间 33 个国家的数据集对研究问题进行了实证检验。因变量是审计师出具修正审计意见的倾向,它是审计师独立性的替代变量。作者使用相对客户规模作为客户重要性的替代变量。作者采用了 Heckman(1979 年)两阶段模型,以减轻在选择 Big-N 审计师时可能涉及的内生性问题。研究结果通过对大量公司样本进行分析,并控制公司和国家/地区层面的因素,本研究发现,相对于其他国家的客户,Big-N 和非 Big-N 审计师都更有可能向保密文化浓厚的国家的客户出具经修改的审计意见。然而,相对于其他客户而言,N 大审计师更有可能对具有保密文化的重要经济客户出具经修改的审计意见,而非 N 大审计师则没有证据或证据较弱。本研究为审计师的独立性提供了一个新的视角,即即使在相同的保密文化下,审计师的报告行为也会因客户的重要性和审计师类型的不同而不同,从而丰富了相关文献。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
5.40
自引率
13.80%
发文量
45
期刊介绍: The key areas addressed are: ■Audit and Assurance (financial and non-financial) ■Financial and Managerial Reporting ■Governance, controls, risks and ethics ■Organizational issues including firm cultures, performance and development In addition, the evaluation of changes occurring in the auditing profession, as well as the broader fields of accounting and assurance, are also explored. Debates concerning organizational performance and professional competence are also covered.
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