Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/61415
Title: Do school ties between auditors and client executives influence audit outcomes?
Authors: Guan, Y
Su, LN 
Wu, D
Yang, Z
Keywords: Audit fee
Audit quality
School tie
Social network
Issue Date: 2016
Publisher: North-Holland
Source: Journal of accounting and economics, 2016, v. 61, no. 2-3, p. 506-525 How to cite?
Journal: Journal of accounting and economics 
Abstract: We identify connected auditors as those who attended the same university as the executives of their clients. Using manually collected data from China, we find that connected auditors are more likely to issue favorable audit opinions, especially for financially distressed clients. Moreover, companies audited by connected auditors report significantly higher discretionary accruals, are more likely to subsequently restate earnings downward, and have lower earnings response coefficients. Lastly, connected auditors earn higher audit fees. Collectively, our evidence suggests the impairment of audit quality when auditors and client executives have school ties and the presence of social reciprocity derived from school ties.
URI: http://hdl.handle.net/10397/61415
ISSN: 0165-4101
DOI: 10.1016/j.jacceco.2015.09.003
Appears in Collections:Journal/Magazine Article

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