Failure of auditors

The lack of compliance for business combinations in C hina

Datos Bibliográficos

ID12899656
AutoresRoss Taplin (0000-0002-5353-7448), Yafang Zhao, Alistair Brown (0000-0002-4529-9099)
Año2013
Volumen8
Número3
Páginas310-331
Fecha de publicación2013-01-07
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaRegulation & Governance (JOURNAL)
Identificadores de la revistaISSN: 1748-5983 • E-ISSN: 1748-5991
EditorialWiley (PUBLISHER • GB)
DOI10.1111/rego.12011
OpenAlexW1684388899
IdiomaEN
Citas recibidas2
Referencias citadas46

This empirical study investigates the compliance of 344 C hinese listed companies with the A ccounting S tandard for E nterprises No. 20‐ B usiness C ombination , a mandatory reporting standard applicable to companies involved in business combinations. C hina has recently reformed its auditing sector, enabling private firms to provide auditing services. The results of the study show a low level of compliance by C hinese listed companies. While companies audited by C hinese domestic auditors have significantly lower compliance than companies audited by B ig F our auditors on supplementary disclosure that is mandatory under the C hinese accounting standards, compliance remains low even after companies receive unqualified reports from these international auditors. There appears to be a lack of commitment, and possibly expertise, among B ig F our auditors, in fully applying the reporting requirements of the business combination standard in a C hinese setting. This raises concerns about the independence of C hinese auditing in disclosing reliable information about business combinations. Broader theoretical contributions of the paper go beyond the C hinese context by problematizing whether well‐resourced international auditors uphold internationally expected standards or succumb to local non‐compliant practices

Audit · Business · Compliance (psychology · Context (archaeology · Auditing, Earnings Management, Governance · Corruption and Economic Development · Regulation and Compliance Studies · Accounting