Government quality, auditor choice and adoption of IFRS: A cross country analysis |
Abstract:
We examine the association between country-level government quality and firms' choice of external auditors. Using a cross-sectional sample of 142,193 firm-year observations from 46 countries over 1998–2007, we show that the government quality of a country has a significant positive effect on the likelihood of choosing Big 4 auditors by firms in that country. We also show that firms in countries with strong governments that have adopted IFRS are more likely to choose Big 4 than non-Big 4 auditors. To our knowledge, this is the first study of its kind to provide direct evidence on the role of government quality in firms' choice of external auditors. Choice of a Big 4 auditor may be regarded as a proxy for the demand for high quality financial reporting, and thus the results provide insights for policy makers on the importance of government quality toward improving financial reporting quality in a country. |
| Keywords: |
Government quality Big 4 IFRS Auditor quality Investor protection |
| Author(s): |
Muhammad Nurul Houqe, Reza M. Monem , Tony van Zijl |
| Source: |
Advances in Accounting, incorporating Advances in International Accounting 28 (2012) 307–316 |
| Subject: |
حسابداری و حسابرسی |
| Category: |
مقاله مجله |
| Release Date: |
2012 |
| No of Pages: |
10 |
| Price(Tomans): |
0 |
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بر اساس شرایط و ضوابط ارسال مقاله در سایت مدیر، این مطلب توسط یکی از نویسندگان ارسال گردیده است. در صورت مشاهده هرگونه تخلف، با تکمیل فرم گزارش تخلف حقوق مؤلفین مراتب را جهت پیگیری اطلاع دهید.
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