Available online 25 September 2010 We examine the causes and consequences of falsified financial statements in China. Using bivariate probit regression analysis, we find that firms with high debt and that plan to make equity issues are more likely to manipulate their earnings and thus have to restate their financial reports in subsequent years. We also find that corporate governance structures ...

Using a unique dataset obtained from large-scale panel enterprise surveys conducted in 2005 and 2009, we clarify the survival status of Russian industrial firms before and after the global financial crisis and empirically examine the determinants of firm survival. The estimation of the Cox proportional hazard model provided evidence that the independence of company’s governance bodies, their hu...

W present evidence on components of productivity change in the public accounting industry toward the end of the 20th century. Using revenue and human resource data from 64 of the 100 largest public accounting firms in the United States for the 1995–1999 period, we analyze productivity change, technical progress, and relative efficiency change over time. The average public accounting firm experi...

It is important to assess the factors that affect firms’ strategies for environmental improvement. Taking China’s pilot of officials’ off-office accountability audit natural resource assets (hereafter audit) commenced in 2014 as an exogenous shock government audits leading officials, we use a difference-in-differences method (DID) examine impact on green innovation strategies. Our results show ...

The Sarbanes-Oxley Act (SOX) mandates management evaluation and independent audits of internal control effectiveness. The mandate is costly to firms but may yield benefits through lower information risk that translates into lower cost of equity. We use unaudited pre-SOX 404 disclosures and SOX 404 audit opinions to assess how changes in internal control quality affect firm risk and cost of equi...

It is now generally recognized that in order to make significant advances in accident prevention, the focus of industrial firms must shift from assessing the risks of existing production and manufacturing systems to discovering technological alternatives, i.e. from the identification of problems to the identification of solutions. Encouraging the industrial firm to perform (1) an inherent safet...

This article searches for and defines efficient regulation of the provision of non-audit services by auditors to their audit clients. From an examination of the particular problems posed by these services it is concluded that they reduce total costs, increase technical competence, and motivate more intense competition. Furthermore, they do not necessarily damage auditor independence or the qual...

We show that board interlocked firms' accounting practices as reflected in earnings quality are significantly correlated, and more so for audit committee interlocks. We also show that these associations arise after interlock formation and cease after interlock dissolution, consistent with the notion that information about accounting practices transfers between interlocked firms. It has been sai...

In this paper we investigate audit pricing for financial institutions. We modify the standard audit fee model for industrial companies by incorporating measures of risk and complexity that are either unique to or more relevant for banks, and that are used by bank regulatory agencies. For a sample of 277 financial institutions in fiscal 2000, we find that audit fees are higher for banks having m...

The accounting profession has raised concerns that excessive liability exposure renders audit firms unwilling to provide audit services to risky clients, limiting the prospective clients’ ability to raise external capital. In this paper we address this concern in a model where the auditor evaluates the riskiness of the client before accepting the client engagement. We consider a setting where a...