Political contributions and the auditor–client relationship

IF 2.2 3区管理学 Q2 BUSINESS, FINANCE Journal of Business Finance & Accounting Pub Date : 2024-03-05 DOI:10.1111/jbfa.12791

Frank Heflin, Dana Wallace

引用次数: 0

Abstract

We investigate the impact of audit client political contributions on various audit attributes. We find that, despite having poorer accruals quality, clients with higher political contributions have fewer restatements, receive no more going concern qualified opinions and receive fewer reported material weaknesses. Additionally, we find that auditors earn higher fees from and have longer tenure with their politically connected clients. Our evidence is indirect, but the totality of our results is most consistent with an economic bond between auditors and their politically connected clients, whereby clients are allowed more accounting discretion and receive fewer adverse audit outcomes, and the auditor charges a persistent risk premium. We conclude that client political connections likely influence audit outcomes because of either reduced scrutiny from regulators or direct influence on auditors. We extend a growing body of research on the consequences of corporate political connections.

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政治献金与审计师-客户关系

我们研究了审计客户政治捐款对各种审计属性的影响。我们发现，尽管权责发生制质量较差，但政治献金较高的客户重报较少，收到的持续经营保留意见不多，报告的重大缺陷也较少。此外，我们还发现审计师从政治关联客户那里赚取的费用更高，与政治关联客户的合作时间更长。我们的证据是间接的，但我们的全部结果最符合审计师与其政治关联客户之间的经济纽带，即允许客户有更多的会计自由裁量权，获得较少的不利审计结果，审计师收取持续的风险溢价。我们的结论是，客户的政治关系很可能会影响审计结果，因为监管机构的审查减少或对审计师产生直接影响。我们扩展了越来越多关于企业政治关系后果的研究。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Business Finance & Accounting BUSINESS, FINANCE-

CiteScore

4.40

自引率

17.20%

发文量

期刊介绍： Journal of Business Finance and Accounting exists to publish high quality research papers in accounting, corporate finance, corporate governance and their interfaces. The interfaces are relevant in many areas such as financial reporting and communication, valuation, financial performance measurement and managerial reward and control structures. A feature of JBFA is that it recognises that informational problems are pervasive in financial markets and business organisations, and that accounting plays an important role in resolving such problems. JBFA welcomes both theoretical and empirical contributions. Nonetheless, theoretical papers should yield novel testable implications, and empirical papers should be theoretically well-motivated. The Editors view accounting and finance as being closely related to economics and, as a consequence, papers submitted will often have theoretical motivations that are grounded in economics. JBFA, however, also seeks papers that complement economics-based theorising with theoretical developments originating in other social science disciplines or traditions. While many papers in JBFA use econometric or related empirical methods, the Editors also welcome contributions that use other empirical research methods. Although the scope of JBFA is broad, it is not a suitable outlet for highly abstract mathematical papers, or empirical papers with inadequate theoretical motivation. Also, papers that study asset pricing, or the operations of financial markets, should have direct implications for one or more of preparers, regulators, users of financial statements, and corporate financial decision makers, or at least should have implications for the development of future research relevant to such users.

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