RT Article
T1 Individual Auditor Conservatism After CSRC Sanctions
JF Journal of business ethics
VO 136
IS 1
SP 133
OP 146
A1 Sun, Jerry
A1 Cahan, Steven F.
A1 Xu, Jing
LA English
PB Springer Science + Business Media B. V
YR 2016
UL https://www.ixtheo.de/Record/1785657917
AB This study examines whether sanctions imposed by the China Securities Regulatory Commission (CSRC) against individual auditors result in greater auditor conservatism. Using a difference-in-differences research design, we find that clients of sanctioned individual auditors have lower discretionary accruals in the post-sanction period than in the pre-sanction period when compared to a matched control group of clients audited by individual auditors who were not sanctioned. Our findings suggest that sanctions imposed by the CSRC on individual auditors can lead to improvements in audit quality by increasing the conservatism of the sanctioned auditors. That is, individual auditors are more likely to resist their clients’ income-increasing accounting manipulations after being sanctioned by the CSRC.
K1 Auditor conservatism
K1 Sanction
K1 Regulatory governance
K1 Auditing ethics
DO 10.1007/s10551-014-2514-z