The high-speed railway opening and audit quality

Evidence from China

Bibliographic Data

ID13119295
AuthorsYurou Liu (0000-0002-3026-3480, Renmin University of China, corresponding author)
Year2021
Volume11
Issue4
Pages494-515
Publication date2021-06-02
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueEconomic and Political Studies (JOURNAL)
Journal identifiersISSN: 2470-4024 • E-ISSN: 2095-4816
PublisherTaylor & Francis (PUBLISHER • GB)
DOI10.1080/20954816.2021.1914415
OpenAlexW3170018145
LanguageEN
Citations received1
References cited40

This study examines the effect of the high-speed railway operation on audit quality proxied by absolute abnormal accruals. Auditing is a complex activity that relies heavily on professional judgement and sufficient evidence. Auditors usually need to conduct on-the-spot investigations and face-to-face conversations to obtain auditing evidence. In this process, transportation plays an important role. From the perspective of geography, this paper examines the impact of the high-speed railway implementation on audit quality. It finds that the high-speed railway operation significantly improves audit quality. The results are robust to parallel tests and when using the Big Eight auditors to proxy for audit quality. Further analyses suggest that this effect is more pronounced in firms audited by non-local auditors and firms located in non-first-tier cities. Taken together, these results suggest that the opening of high-speed railways is effective in improving audit quality

Accrual · Audit · Business · China · Earnings · Internal audit · Joint audit · Judgement · Political science · Proxy (statistics · Quality (philosophy · Quality audit · Auditing, Earnings Management, Governance · Aviation Industry Analysis and Trends · Computer Science · Corporate Finance and Governance · Accounting

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