Auditors' Role in China: The Joint Effects of Guanxi and Regulatory Sanctions on Earnings Management

doi:10.1177/0148558X15579492

CORC > 上海财经大学 > 上海财经大学

	Auditors' Role in China: The Joint Effects of Guanxi and Regulatory Sanctions on Earnings Management
	Du, Ning 1; Ronen, Joshua 2; Ye, Jianfang 3
刊名	JOURNAL OF ACCOUNTING AUDITING AND FINANCE
	2015-10
卷号	30 期号:4 页码:461-483
关键词	Chinese auditors earnings management auditor independence regulatory sanctions judgment
ISSN号	0148-558X
DOI	10.1177/0148558X15579492
英文摘要	This study investigates the role of Chinese auditors in preventing aggressive management financial reporting. We conduct two experiments to investigate auditors' behaviors. The first experiment examines auditors' awareness of earnings management (EM) attempts induced by the delisting rule. One hundred seventy-four Chinese auditors participated in the study. The evidence shows that auditors believe the use of the classification of investment transactions to avoid losses is appropriate. The second experiment investigates whether the bond (Guanxi) between managers and auditors may have contributed to auditors' reluctance to mitigate delisting-motivated EM and whether increased regulatory enforcement may moderate this behavior. We find that Guanxi undermines auditors' ability to correct EM. Specifically, when auditors have close bond (Guanxi) with managers, they are less likely to recommend adjustments; however, we find that increased penalty has a positive effect on auditors' performance, as harsh penalties/sanctions enhance their willingness to challenge managers' decisions.
WOS研究方向	Business & Economics
语种	英语
出版者	SAGE PUBLICATIONS INC
WOS记录号	WOS:000212069800003
内容类型	期刊论文
源URL	[http://10.2.47.112/handle/2XS4QKH4/1452]
专题	上海财经大学
通讯作者	Du, Ning
作者单位	1.Depaul Univ, Chicago, IL 60604 USA; 2.NYU, New York, NY USA; 3.Shanghai Univ Finance & Econ, Shanghai, Peoples R China
推荐引用方式 GB/T 7714	Du, Ning,Ronen, Joshua,Ye, Jianfang. Auditors' Role in China: The Joint Effects of Guanxi and Regulatory Sanctions on Earnings Management[J]. JOURNAL OF ACCOUNTING AUDITING AND FINANCE,2015,30(4):461-483.
APA	Du, Ning,Ronen, Joshua,&Ye, Jianfang.(2015).Auditors' Role in China: The Joint Effects of Guanxi and Regulatory Sanctions on Earnings Management.JOURNAL OF ACCOUNTING AUDITING AND FINANCE,30(4),461-483.
MLA	Du, Ning,et al."Auditors' Role in China: The Joint Effects of Guanxi and Regulatory Sanctions on Earnings Management".JOURNAL OF ACCOUNTING AUDITING AND FINANCE 30.4(2015):461-483.