Increasing auditors' competence : the impact of the ST regulation of the CSRC
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857768514-MIT.pdf
Description
Full printable version
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6.1 MB
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Author(s)
Shi, Yanting, S.M. Massachusetts Institute of Technology
Advisor(s)
S.P. Kothari.
Alternative Title
Impact of the Special Treatment regulation of the Chinese Security Regulation Commission
Date Issued
2013
Publisher
Massachusetts Institute of Technology
Abstract
This paper examines the competence and independence of Chinese auditors. I find significant positive correlation between the modified audit opinions (MAOs) of China A-share companies from 2002 to 2011 and parameters of the clients' company-level control risks, auditor changes, and relative client importance. The evidence indicates that Chinese auditors generally demonstrate competence and independence. I argue that with the "Special Treatment" (ST) regulation, the audit quality of Chinese auditors remains satisfactory; without the ST regulation, the audit quality of Chinese auditors deteriorates. I use the regression results to substantiate that the audit failures of cross-listed Chinese companies occur because of the unavailability of the ST regulation, since the ST regulation has helped to improve the competence of auditors in China. Finally, I analyze the audit quality of "Big Four" affiliate companies in China, and find that the "Big Four" in China do not exhibit higher audit quality compared to local Chinese auditing firms. In fact, the quality of the "Big Four" auditing firms equals that of their non-"Big Four" peers..
Description
Thesis (S.M.)--Massachusetts Institute of Technology, Sloan School of Management, 2013.
Cataloged from PDF version of thesis.
Includes bibliographical references (p. 46-51).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
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