Board informal hierarchy and audit quality: evidence from China

IF 2.8 3区 管理学 Q2 BUSINESS, FINANCE
Yi Zhang, Yang Wang, Jiaxin Liao
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引用次数: 1

Abstract

Purpose Improving audit quality is an important research area of managerial accounting. This study focuses on the informal institutions within organizations and their impact on audit quality. Specifically, this study aims to examine the impact of the informal hierarchy among directors on audit quality. Design/methodology/approach The authors examine Chinese companies with listed shares from 2008 to 2020. The authors proxy for audit quality using discretionary accruals and small profits, and use ordinary least squares regression to test their hypotheses. Findings The results demonstrate that the informal hierarchy of the board improves audit quality. The results are robust to a battery of sensitivity analyses. Additionally, there is weak evidence that the effect of the board’s informal hierarchy on audit quality is weaker in state-owned enterprises. Moreover, the mechanism tests indicate that the board’s informal hierarchy improves audit quality through the improvement of internal controls. In addition, the impact of the informal hierarchy among directors on audit quality further improves firm performance. However, audit fees are not reduced further because the board’s informal hierarchy demands higher audit quality by choosing industry audit experts. Originality/value This study not only enriches the research on the economic consequences of the board’s informal hierarchy but also expands on studies on antecedents of audit quality.
董事会非正式层级与审计质量——来自中国的证据
目的提高审计质量是管理会计的一个重要研究领域。本研究的重点是组织内部的非正式制度及其对审计质量的影响。具体而言,本研究旨在探讨董事非正式层级对审计质量的影响。设计/方法/方法作者考察了2008年至2020年的中国上市公司。作者代理审计质量使用可支配性应计项目和小额利润,并使用普通最小二乘回归来检验他们的假设。结果表明,董事会的非正式层级结构提高了审计质量。结果在一系列敏感性分析中是可靠的。此外,国有企业董事会非正式层级对审计质量的影响较弱。此外,机制检验表明,董事会的非正式层级通过内部控制的改善提高了审计质量。此外,董事非正式层级对审计质量的影响进一步提高了公司绩效。然而,审计费用并没有进一步降低,因为董事会的非正式等级要求通过选择行业审计专家来提高审计质量。原创性/价值本研究不仅丰富了对董事会非正式等级制度的经济后果的研究,而且拓展了对审计质量前因的研究。
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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