Do investors differentiate between types of component auditors? Evidence from auditor ratification voting

IF 2.2 3区管理学 Q2 BUSINESS, FINANCE

Journal of Business Finance & Accounting Pub Date : 2024-07-12 DOI:10.1111/jbfa.12819

Bullipe R. Chintha, Sriniwas Mahapatro

引用次数: 0

Abstract

The Public Company Accounting Oversight Board's Rule 3211 mandates firms to disclose the types of component auditors employed and their contribution to the overall audit. Using a difference‐in‐differences approach, we examine the effect of the disclosure of component auditor usage on shareholder dissatisfaction. We find that multinational companies (MNCs) reporting higher use of large component auditors (LCAs), defined as component auditors contributing materially to the audit, experience a 17% decrease in shareholder votes against (or abstaining from) auditor ratification compared to MNCs with lower usage. This effect is more pronounced for firms with high institutional shareholding. We fail to find evidence of any effect on firms with the higher usage of small component auditors (SCAs). Our findings are robust to various definitions for treated and control firms. Our results support the view that, on average, LCAs offer higher “local” benefits and impose lower coordination costs compared to SCAs.

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投资者会区分不同类型的审计师吗？审计师批准投票的证据

上市公司会计监督委员会的第 3211 条规定，公司必须披露所聘用的部分审计师的类型及其对整体审计的贡献。我们采用差分法研究了披露部分审计师使用情况对股东不满的影响。我们发现，与使用率较低的跨国公司相比，使用率较高的大型审计师（定义为对审计有重大贡献的审计师）的跨国公司的股东反对（或弃权）审计师批准的投票减少了 17%。对于机构持股比例较高的公司，这种影响更为明显。我们没有发现任何证据表明使用小型审计师（SCA）较多的公司会受到影响。我们的研究结果对不同定义的处理公司和对照公司都是稳健的。我们的结果支持这样一种观点，即平均而言，与 SCA 相比，LCA 能提供更高的 "本地 "效益，并带来更低的协调成本。

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

Journal of Business Finance & Accounting BUSINESS, FINANCE-

CiteScore

4.40

自引率

17.20%

发文量

期刊介绍： Journal of Business Finance and Accounting exists to publish high quality research papers in accounting, corporate finance, corporate governance and their interfaces. The interfaces are relevant in many areas such as financial reporting and communication, valuation, financial performance measurement and managerial reward and control structures. A feature of JBFA is that it recognises that informational problems are pervasive in financial markets and business organisations, and that accounting plays an important role in resolving such problems. JBFA welcomes both theoretical and empirical contributions. Nonetheless, theoretical papers should yield novel testable implications, and empirical papers should be theoretically well-motivated. The Editors view accounting and finance as being closely related to economics and, as a consequence, papers submitted will often have theoretical motivations that are grounded in economics. JBFA, however, also seeks papers that complement economics-based theorising with theoretical developments originating in other social science disciplines or traditions. While many papers in JBFA use econometric or related empirical methods, the Editors also welcome contributions that use other empirical research methods. Although the scope of JBFA is broad, it is not a suitable outlet for highly abstract mathematical papers, or empirical papers with inadequate theoretical motivation. Also, papers that study asset pricing, or the operations of financial markets, should have direct implications for one or more of preparers, regulators, users of financial statements, and corporate financial decision makers, or at least should have implications for the development of future research relevant to such users.