财务、会计seminar 第一百三十七期讲座

题目:Corporate Corruption Culture, Auditor Choice, and Audit  Pricing

演讲者:Tracy Gu  Assistant Professor

    University of Hong Kong

时间:20161125日(周五)上午 1000 - 11:30

地点:嘉庚二205

主持人:郑祯  助理教授

参  加 者:对会计、财务研究有兴趣的师生

简介:We examine the external auditors’ response to  firms’ corruption culture for a large sample of U.S.  firms. Using a firm-level corruption culture measure constructed using cultural  background information on key company insiders, we show that firms with a  high-corruption culture are less likely to have Big 4 auditors and industry  specialist auditors. Given auditor choice, firms with high-corruption culture  incur higher audit fees and have longer audit report lag. In further analysis,  we find that the effect of corruption culture on audit fees is more pronounced  for companies with Big 4 auditors and for those with material weaknesses in  their internal control systems. The effect declined after the implementation of  Section 404 of the Sarbanes–Oxley Act requiring auditor  attestation to the quality of company internal controls. In addition, from 2001  to 2005, 5 states had a staggered adoption of universal demand (UD) laws, which  increase the obstacles for shareholders to initiate lawsuits alleging breach of  fiduciary duty by directors or officers. Using a difference-in-differences  analysis, we show that the changes in audit fees are less negative for firms  with a high-corruption culture in the 5-state treatment group relative to the  matched control group. Overall, our findings provide insights into the important  role firms’ corruption culture plays in audit production