Audit firms’ client acceptance decisions: Does partner-level industry expertise matter?

Yu Ting Hsieh, Chan Jane Lin

研究成果: Article同行評審

24 引文 斯高帕斯(Scopus)

摘要

This study examines whether auditor industry expertise affects firms’ client acceptance decisions. Analyzing listed firms in Taiwan, where audit partners’ signatures are disclosed on the audit report, we find that partner-level industry specialists, rather than firm-level industry specialists, are less likely to accept clients with higher audit risk. We also provide weak evidence that partner-level industry specialists are less likely to accept clients with higher financial risk. This is consistent with the notion that partner-level industry specialists have an incentive to protect their reputation when making client acceptance decisions. In 2002, following the spirit of the Sarbanes-Oxley Act (SOX), the Securities and Futures Commission in Taiwan adopted a series of new rules to improve audit quality. We examine the effect of SOX on client acceptance decisions and the results indicate that partner-level industry specialists manage risk by accepting clients with less audit risk since litigation risk increased after SOX.

原文English
頁(從 - 到)97-120
頁數24
期刊Auditing
35
發行號2
DOIs
出版狀態Published - 2016 5月

All Science Journal Classification (ASJC) codes

  • 會計
  • 金融
  • 經濟學與計量經濟學

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