Does signing auditors’ communist party membership shape audit quality? Evidence from China

Bibliographic Data

ID15066472
AuthorsFei Hou (0009-0006-1799-1631, Qingdao University), Wenshuo Song (0009-0006-6950-3783, Qingdao University), Lanlan Sun (0000-0003-2047-6113, Qingdao University of Science and Technology), Hao Xiong (0000-0001-5479-7754, Guizhou University of Finance and Economics, corresponding author)
Year2023
Volume36
Issue2
Publication date2023-07-10
Open AccessYes
TypeARTICLE
VenueEconomic Research-Ekonomska Istraživanja (JOURNAL)
Journal identifiersISSN: 1331-677X • E-ISSN: 1848-9664
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/1331677x.2022.2139740
OpenAlexW4308543876
LanguageEN
Citations received1
References cited65

In this article, we investigate the effect of signing auditors' communist party membership on audit quality. Relying on a sample of Chinese listed firms from the period 2001 to 2019, we find that firms with signing auditors who have communist party membership conduct less earnings management, indicating that signing auditors with party membership provide high level of audit quality. Moreover, the above relationship is more pronounced in small audit firms. We also find that firms who are audited by signing auditors with party status have lower likelihood of financial statements and loss avoidance. Further analyses suggest that signing auditors with party status can earn audit fee premium. The positive relationship between signing auditors with party membership and audit quality is more pronounced in non-specialists auditors and high client importance

Audit · Business · China · Communism · Earnings · Earnings Management · Internal audit · Joint audit · Political science · Politics · Quality audit · Auditing, Earnings Management, Governance · Corporate Finance and Governance · Corporate Taxation and Avoidance · Law · Accounting

Tools

Open DOIOpen Access