Topic: Does Voluntary Interim Audit Reduce Agency Costs?
Presenter：Xingqiang Du，Professor of accounting, Xiamen University
Time: April 29, 2011（Friday）3:00—4:30PM
Venue: Room 501, Jiageng Bld 2
Chair：Jun Ruan, assistant professor in finance, IFAS
Abstract：
China provides an unique instituation setting to test whether voluntary interim(semi-annual reports) audit (VIA) can reduce agency costs. With a sample of 3652 firm-year from China over the period of 2002-2006, this study evaluates the impact of VIA on agency costs. We find that VIA Firms have a lower expense ratio (higher assets utilization ratio) as a positive(negative)proxy for agency costs between managers and shareholders, and a lower probability(a less amount) of cash embezzlement as a proxy for agency costs between control shareholedr and minority shareholders. Overall, VIA does reduce agency costs after controlling for potential self-selection bias.