• Media type: E-Article
  • Title: Auditor choice and accruals patterns of cross-listed firms
  • Contributor: Wang, Bing [Author]; Xin, Qingquan [Author]
  • Published: Amsterdam: Elsevier, 2011
  • Language: English
  • DOI: https://doi.org/10.1016/j.cjar.2011.09.002
  • ISSN: 1755-3091
  • Keywords: G38 ; G15 ; M40 ; Accruals ; Big 4 auditors ; Emerging markets ; Cross-listing
  • Origination:
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  • Description: We examine the association between auditor choice and the accruals patterns of Chinese listed firms that cross-list in Hong Kong. Our evidence suggests that the clients of Big 4 auditors report lower unsigned discretionary accruals relative to the clients of non-Big 4 auditors. Further, we find that cross-listed firms with non-Big 4 auditors are more likely to understate their earnings and experience larger reversals of accruals in the future than cross-listed firms with Big 4 auditors. These findings suggest that Big 4 auditors play a meaningful role in improving earnings quality for cross-listed firms, which helps to explain why cross-listed firms have higher earnings quality than their domestic counterparts, as documented in the previous literature.
  • Access State: Open Access
  • Rights information: Attribution - Non Commercial - No Derivs (CC BY-NC-ND) Attribution - Non Commercial - No Derivs (CC BY-NC-ND)