Academic literature on the topic 'Auditors' reports – China'
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Journal articles on the topic "Auditors' reports – China"
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Lu, Yingfa, Falconer Mitchell, and Chris Pong. "Capital verification and auditor liability: evidence from China." Managerial Auditing Journal 30, no. 6/7 (July 6, 2015): 657–80. http://dx.doi.org/10.1108/maj-02-2014-1002.
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Purpose – This paper aims to examine the different perspectives of auditors and non-auditors on this question, along with the rationale and impact of these differences. Chinese company law requires an audit report on paid-up capital when business entities are newly formed or their capital altered, which raises questions regarding the liability of auditors should the business entities fail. Design/methodology/approach – Interviews and a questionnaire survey were conducted to analyse how legislation can impact on interested parties in a relatively immature audit environment. The theories of social construction of reality and symbolic interactionism are used as a basis for explaining the different conceptions of capital verification held by interested parties. Findings – There is a mismatch between the purpose of capital verification and the functions of paid-up capital. Paid-up capital is not a reliable indicator of business liquidity and creditworthiness. Auditors and non-auditors have different understandings about the assurance provided by paid-up capital at the point of company formation or auditing field work, and at the point of actual trading after the company formation or auditing field work. They also differ on the causation between deficient capital verification reports and trading loss. The liability crisis adversely influenced auditors’ perception of the capital verification service, although it did not lead to outright rejection by them. Originality/value – This paper describes an important compliance auditing service in China. By conducting an analysis of the conflicting views of auditors and non-auditors on capital verification, it contributes to the existing literature on the sources of disputes between auditors and other stakeholders, and the efforts to establish a balanced auditor liability regime.
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Chen, Feng, Xingqiang Du, Shaojuan Lai, and Mary Ma. "Does the use of honorific appellations in audit reports connote higher financial misstatement risk? Evidence from China." Asian Review of Accounting 26, no. 2 (May 8, 2018): 154–81. http://dx.doi.org/10.1108/ara-08-2017-0128.
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Purpose From the sociolinguistic perspective, the purpose of this paper is to examine whether the honorific and actual-name appellations that Chinese auditors use to address clients in audit reports connote differential financial misstatement risk. Specifically, the authors hypothesize that auditors’ use of honorifics signals their inferior social status relative to their clients, thereby leading to compromised auditor independence, lower audit quality, and higher financial misstatement risk. Design/methodology/approach The authors use a sample of manually coded appellation data from audit reports of Chinese public firms between 2003 and 2012 to conduct the research. Findings The authors find significantly greater financial misstatements, both in terms of likelihoods and magnitudes, for companies addressed by honorifics than for those addressed by actual names. Moreover, compared to auditors’ consistent honorific usage, discretionary honorific usage has a stronger positive association with misstatements. The authors further show that the positive association between honorific usage and client misstatement risk weakens when the audit firm is a Top 10 accounting firms in China, is an industry specialist, is formed as a partnership, or resides in a more concentrated audit market. Originality/value This study contributes to the sociolinguistics literature in accounting and provides evidence supporting the reform proposed by the International Auditing and Assurance Standards Board to enhance the usefulness of audit reporting.
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Lin, Chan-Jane, Hsiao-Lun Lin, and Ai-Ru Yen. "Dual audit, audit firm independence, and auditor conservatism." Review of Accounting and Finance 13, no. 1 (February 4, 2014): 65–87. http://dx.doi.org/10.1108/raf-06-2012-0053.
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Purpose – This study aims to examine whether China's unique dual audit policy affects one specific aspect of audit quality: auditor conservatism. In China, listed companies issuing B/H-shares in addition to A-shares must release two financial reports – one based on Chinese accounting standards and the other based on international accounting standards (ISA). The China Securities Regulatory Commission (CSRC) further requires that the financial reports following Chinese accounting standards should be audited by a domestic CPA firm, and the financial reports following ISA should be audited by an approved overseas CPA firm. This study investigates whether the dual audit requirement induces more auditor conservatism. Design/methodology/approach – Based on a sample of 7,046 firm-year observations that issue A-shares from 2001 to 2006, the authors empirically test whether the dual audit requirement induces more auditor conservatism, measured by the level of discretionary accruals. Findings – The authors find the dual audit requirement significantly restricts the use of income-increasing discretionary accruals but not income-decreasing discretionary accruals. Moreover, financial reporting becomes most conservative when two auditors are from two un-affiliated audit firms. Nevertheless, the difference-in-difference analysis fails to show a significant decrease in auditor conservatism after the revocation of the dual audit rule for the treatment group with dual audit before but no dual audit after 2007 comparing to the control group that experience no change in 2007. Originality/value – First, the previous studies examine issues regarding the effects of supervision pressure through experimental setting. The authors extend the literature by examining empirically the impact of perceived peer pressure on auditor conservatism. Second, the findings from China regarding the effect of the dual audit system on auditor conservatism serve as a reference for other emerging markets that have not yet established sound audit systems.
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Nguyen, Loan Quynh Thi, Duong Thuy Le, Hiep Ngoc Luu, Anh Huu Nguyen, and Thinh Gia Hoang. "The role of audit quality in preventing firm misreporting: empirical evidence from China." International Journal of Managerial Finance 16, no. 1 (October 1, 2019): 83–100. http://dx.doi.org/10.1108/ijmf-04-2019-0122.
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Purpose The purpose of this paper is to explore the role of external audit quality in reducing firm misreporting practices. Design/methodology/approach Data are gathered from a number of sources including the Osiris database and firms’ annual reports to construct a comprehensive data set containing financial and non-financial information of over 3,100 publicly listed firms in China during the period 2009–2017. A number of rigorous empirical specifications are utilized with the use of probit, logit and conditional logit regressions, as well as panel pooled OLS and fixed-effect estimators. The IV-2SLS, 2-step system GMM and difference-in-differences techniques are also employed to deal with the potential endogeneity bias to ensure the robustness of the empirical results. Findings The empirical results reveal that larger firms and firms having more tangible assets and greater retained earnings are more likely to employ a better-quality external auditor. Subsequently, higher audit quality leads to a deterioration in corporate misreporting. However, these results are not homogenous across firms. While we document similar findings in the case of non-state-owned firms, state-owned enterprises (SOEs) appear to have less tendency to hire a higher-quality auditor, and higher-quality auditors in turn do not play a significant role in reducing misreporting practices in SOEs. Originality/value This paper contributes to a better understanding of the mechanism to mitigate corporate misreporting practices. It is one of the few to empirically investigate auditor selections and the association between external audit quality and corporate misreporting practices in China.
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Dang, Li, and Qiaoling Fang. "Does Attestation of the effectiveness of Internal Control over Financial Reporting Discourage Earnings Management? Evidence from China." Accounting and Finance Research 7, no. 4 (August 24, 2018): 1. http://dx.doi.org/10.5430/afr.v7n4p1.
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To improve financial reporting quality, the Chinese government issued the Basic Standard for Enterprise Internal Control in 2008 and other related guidelines/regulations in the following years (hereafter China SOX). The scope of China SOX is broader but similar to Section 404 of the Sarbanes-Oxley Act (SOX) in the U.S. Formal adoptions of China SOX requires management and external auditor’s report on the effectiveness of internal control over financial reporting (ICFR). A company’s ICFR, if effective, should provide reasonable assurance that the company’s financial statements are reliable and prepared in accordance with the applicable accounting standards. The purpose of this study is to investigate whether China external auditor attestation of ICFR discourage earnings management, an indicator of financial reporting quality. By analyzing a sample of Chinese public firms during 2011 to 2013, we find that: (1) Chinese firms that disclose audited ICFR reports exhibit lower earnings management than firms that do not; (2) Chinese firms that are mandated to disclose audited ICFR reports exhibit lower earnings management than firms that voluntarily disclose audited ICFR reports. Our empirical results seem to suggest that attestation of the effectiveness of ICFR discourages earnings management and therefore improve financial reporting quality.
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Shi-Ming Huang, Shi-Ming Huang, Chang-ping Chen Shi-Ming Huang, and Tzu-ching Wong Chang-ping Chen. "Application of Machine Learning in Auditing Teaching: A Case Study of Predicting the Audit Report Type of China ST Listed Companies." International Journal of Computer Auditing 2, no. 1 (December 2020): 023–40. http://dx.doi.org/10.53106/256299802020120201003.
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<p>Artificial intelligence is an important emerging technology in the accounting industry. Fear and hype associated with artificial intelligence and its impact on accounting and auditing jobs have pervaded the professional fields of accounting and auditing. It is important to develop AI competency in accountants and auditors. This paper presents a teaching case for a professor or lecturer to use for teaching machine learning to accounting students. The case is based on openly available data from the China Stock Market & Accounting Research database and aims to teach students how to predict the future audit report type of a China ST listed company. Through case teaching, students can learn skills related to computer-assisted auditing tools and machine learning (such as ACL) develop the confidence to apply artificial intelligence in their education and future work.</p> <p> </p>
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Hu, Kuang-Hua, Fu-Hsiang Chen, and Gwo-Hshiung Tzeng. "CPA FIRM’S CLOUD AUDITING PROVIDER FOR PERFORMANCE EVALUATION AND IMPROVEMENT: AN EMPIRICAL CASE OF CHINA." Technological and Economic Development of Economy 24, no. 6 (December 20, 2018): 2338–73. http://dx.doi.org/10.3846/tede.2018.6619.
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While CPA (Certified Public Accountant) firms utilize cloud auditing technologies to generate auditing reports and convey information to their clients in the Internet of Things (IoT) Era, they often cannot determine whether cloud auditing is a secure and effective form of communication with clients. Strategies related to cloud auditing provider evaluation and improvement planning are inherently multiple attribute decision making (MADM) issues and are very important to the auditor industry. To overcome these problems, this paper proposes an evaluation and improvement planning model to be a reference for CPA firms selecting the best cloud auditing provider, and illustrates an application of such a model through an empirical case study. The DEMATEL (decision-making trial and evaluation laboratory) approach is first used to analyze the interactive influence relationship map (IIRM) between the criteria and dimensions of cloud auditing technology. DANP (DEMATEL-based ANP) is then employed to calculate the influential weights of the dimensions and criteria. Finally, the modified VIKOR method is utilized to provide improvement priorities for performance cloud auditing provider satisfaction. Based on expert interviews, the recommendations for improvement priorities are privacy, security, processing integrity, availability, and confidentiality. This approach is expected to support the auditor industry to systematically improve their cloud auditing provider selection.
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Y. Li, Eldon. "Corporate politics, philanthropy and governance: their impacts on unit performance." Chinese Management Studies 8, no. 3 (July 29, 2014): 279–87. http://dx.doi.org/10.1108/cms-08-2014-0159.
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Purpose – This aim of this article is to review the 12 manuscripts accepted into the special issue of “Corporate Politics, Philanthropy and Governance” in Chinese Management Studies. It explains basic concepts, provides brief introduction to each manuscript and presents the related findings. Design/methodology/approach – Most manuscripts in this special issue used primary empirical data (collected from field surveys or interviews) or secondary historical data (extracted from published literature, corporate reports or financial databases) for analyses. Both qualitative (case studies, comparative reviews) and quantitative (logistic regression, multiple regression, simultaneous equations) methods were used to draw conclusions. Findings – The results of the studies in this special issue show: Singapore, rather Hong Kong, is a better governance model for China in reforming her society to be corruption free; corporate governance structure affects a firm’s performance and foreign direct investment decision; corporate governance can affect auditor selection only in low and medium agency conflict conditions; trustworthy characteristic of benevolence can mitigate the damages of perceived politics on affective commitment; the firms who selected to expense their research and development expenditures have lower stock price and return; organizational citizenship behavior can mediate the relationship between psychological contract and organizational performance; both relational and formal governance mechanisms can facilitate knowledge transfer in the alliance; companies with political connections are more likely to enter into industries with high entry barriers; circular-economy accounting information disclosure quality has low correlation with the profitability and the location of the listed companies; media self-regulation has a significant influence on philanthropic marketing and brand resonance. Originality/value – The manuscripts in this special issue cover a wide range of topics, including corporate governance, corruption, politics, philanthropy, agency conflict, organizational citizenship behavior, media self-regulation and firm performance. The findings from the studies provide leaders of corporate governance with valuable insights, allowing them to adjust governance mechanisms properly to heighten governance quality and improve firm performance.
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Golomb, Beatrice Alexandra. "Diplomats' Mystery Illness and Pulsed Radiofrequency/Microwave Radiation." Neural Computation 30, no. 11 (November 2018): 2882–985. http://dx.doi.org/10.1162/neco_a_01133.
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Importance: A mystery illness striking U.S. and Canadian diplomats to Cuba (and now China) “has confounded the FBI, the State Department and US intelligence agencies” (Lederman, Weissenstein, & Lee, 2017 ). Sonic explanations for the so-called health attacks have long dominated media reports, propelled by peculiar sounds heard and auditory symptoms experienced. Sonic mediation was justly rejected by experts. We assessed whether pulsed radiofrequency/microwave radiation (RF/MW) exposure can accommodate reported facts in diplomats, including unusual ones. Observations: (1) Noises: Many diplomats heard chirping, ringing or grinding noises at night during episodes reportedly triggering health problems. Some reported that noises were localized with laser-like precision or said the sounds seemed to follow them (within the territory in which they were perceived). Pulsed RF/MW engenders just these apparent “sounds” via the Frey effect. Perceived “sounds” differ by head dimensions and pulse characteristics and can be perceived as located behind in or above the head. Ability to hear the “sounds” depends on high-frequency hearing and low ambient noise. (2) Signs/symptoms: Hearing loss and tinnitus are prominent in affected diplomats and in RF/MW-affected individuals. Each of the protean symptoms that diplomats report also affect persons reporting symptoms from RF/MW: sleep problems, headaches, and cognitive problems dominate in both groups. Sensations of pressure or vibration figure in each. Both encompass vision, balance, and speech problems and nosebleeds. Brain injury and brain swelling are reported in both. (3) Mechanisms: Oxidative stress provides a documented mechanism of RF/MW injury compatible with reported signs and symptoms; sequelae of endothelial dysfunction (yielding blood flow compromise), membrane damage, blood-brain barrier disruption, mitochondrial injury, apoptosis, and autoimmune triggering afford downstream mechanisms, of varying persistence, that merit investigation. (4) Of note, microwaving of the U.S. embassy in Moscow is historically documented. Conclusions and relevance: Reported facts appear consistent with pulsed RF/MW as the source of injury in affected diplomats. Nondiplomats citing symptoms from RF/MW, often with an inciting pulsed-RF/MW exposure, report compatible health conditions. Under the RF/MW hypothesis, lessons learned for diplomats and for RF/MW-affected civilians may each aid the other.
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Li, Boxuan, Shizhe Deng, Bomo Sang, Weiming Zhu, Bifang Zhuo, Menglong Zhang, Chenyang Qin, Yuanhao Lyu, Yuzheng Du, and Zhihong Meng. "Revealing the Neuroimaging Mechanism of Acupuncture for Poststroke Aphasia: A Systematic Review." Neural Plasticity 2022 (April 21, 2022): 1–23. http://dx.doi.org/10.1155/2022/5635596.
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Background. Aphasia is a common symptom in stroke patients, presenting with the impairment of spontaneous speech, repetition, naming, auditory comprehension, reading, and writing function. Multiple rehabilitation methods have been suggested for the recovery of poststroke aphasia, including medication treatment, behavioral therapy, and stimulation approach. Acupuncture has been proven to have a beneficial effect on improving speech functions in repetition, oral speech, reading, comprehension, and writing ability. Neuroimaging technology provides a visualized way to explore cerebral neural activity, which helps reveal the therapeutic effect of acupuncture therapy. In this systematic review, we aim to reveal and summarize the neuroimaging mechanism of acupuncture therapy on poststroke aphasia to provide the foundation for further study. Methods. Seven electronic databases were searched including PubMed, Web of Science, Embase, Cochrane Central Register of Controlled Trials, China National Knowledge Infrastructure, the Wanfang databases, and the Chinese Scientific Journal Database. After screening the studies according to the inclusion and exclusion criteria, we summarized the neuroimaging mechanism of acupuncture on poststroke aphasia, as well as the utilization of acupuncture therapy and the methodological characteristics. Result. After searching, 885 articles were retrieved. After removing the literature studies, animal studies, and case reports, 16 studies were included in the final analysis. For the acupuncture type, 10 studies used manual acupuncture and 5 studies used electroacupuncture, while body acupuncture (10 studies), scalp acupuncture (7 studies), and tongue acupuncture (8 studies) were applied for poststroke aphasia patients. Based on blood oxygen level-dependent (BOLD) and diffusion tensor imaging (DTI) technologies, 4 neuroimaging analysis methods were used including amplitude of low-frequency fluctuation (ALFF), regional homogeneity (ReHo), seed-based analysis, and independent component analysis (ICA). Two studies reported the instant acupuncture effect, and 14 studies reported the constant acupuncture’s effect on poststroke aphasia patients. 5 studies analyzed the correlation between the neuroimaging outcomes and the clinical language scales. Conclusion. In this systematic review, we found that the mechanism of acupuncture’s effect might be associated with the activation and functional connectivity of language-related brain areas, such as brain areas around Broca’s area and Wernicke’s area in the left inferior temporal gyrus, supramarginal gyrus, middle frontal gyrus, and inferior frontal gyrus. However, these studies were still in the preliminary stage. Multicenter randomized controlled trials (RCT) with large sample sizes were needed to verify current evidence, as well as to explore deeply the neuroimaging mechanisms of acupuncture’s effects.
Dissertations / Theses on the topic "Auditors' reports – China"
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YEUNG, Hau Yi. "Do auditors communicate financial misstatement risk in audit report? Evidence from subsequent accounting restatements in China." Digital Commons @ Lingnan University, 2018. https://commons.ln.edu.hk/otd/31.
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Regulators worldwide are considering expanding current audit reporting model to include key audit matters (KAM). Proponents argue that current audit reports are standardized and uninformative to financial statement users. Auditors in current reporting regime can choose to add explanatory notes in audit reports, however, few current studies have investigated the information content of these explanatory notes. This thesis conducts a textual analysis of explanatory notes in auditor reports and examines the predictability of auditors’ explanatory notes consisting of both unqualified and qualified opinions in determining the incidence of subsequent restatements. I hand collect material accounting restatements disclosed by the public companies in China from 2003 to 2017 and obtain modified audit reports from the CSMAR database during the period between 2003 and 2015. Based on a sample of 22,850 firm-years from 2003 to 2015 in China, I find that modified audit opinions, in general, can communicate financial misstatement risks, and the probability of such risks increases when the type of audit opinion is more severe. I also find that compared with unmodified audit opinion, modified ones containing explanatory notes have a higher possibility of subsequently being restated. Further, the predictive power is not the same across different types of explanatory notes. I have shown that explanatory notes including notes emphasizing contingencies and uncertainties and those relating to audit scope limitations have greater predictive power in explaining subsequent accounting restatements. My findings are robust with a set of additional tests. The findings of this thesis indicate that auditors do communicate financial misstatement risks in modified audit opinions (MAOs). Moreover, the findings are consistent with and provide evidence to support policy changes in developing new enhanced auditor reports introduced by the standard setters in China.
Book chapters on the topic "Auditors' reports – China"
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Li, Ning. "Behavioral Invisibility." In Private Regulation of Labor Standards in Global Supply Chains, 17–47. Cornell University Press, 2021. http://dx.doi.org/10.7591/cornell/9781501754517.003.0002.
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This chapter focuses on assessing data reliability, using data provided by AUDCO (a large auditing company) from more than forty thousand audits spanning seven-years across twelve countries and thirteen industries. It highlights China, which reports very high levels of unreliable audit information, and examines the role played by a “gray” actor — the audit consulting company (ACC) — in helping suppliers “pass” audits. ACCs provide a variety of services, including falsification of audit records. The chapter then considers how ACCs “advertise” their services and how they work, through a detailed analysis of an audit consultant's work logs, as well as an assessment of why ACCs may be so successful. The analysis suggests that getting a clear picture of what is really happening in a factory requires a nuanced understanding of the nature of the data that auditors examine. It points to the need for auditors to be better trained at spotting falsified data but also to triangulate with other data and information sources (perhaps from workers). Ultimately, the results show that the lack of reliable data provided to auditors is a major reason for the decoupling we see between private regulation practices and sustainable improvements in working conditions in global supply chains across multiple industries and countries.