The effect of the rules- versus principles-based accounting standards on opinion shopping

IF 2.8 3区 管理学 Q2 BUSINESS, FINANCE Managerial Auditing Journal Pub Date : 2022-11-15 DOI:10.1108/maj-12-2020-2964
H. Chung, Yewon Kim
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引用次数: 1

Abstract

Purpose The purpose of this study is to examine whether the change in accounting standards from the rules-based local GAAP to the principles-based IFRS influences a manager’s opportunistic auditor choice for a favorable audit opinion, opinion shopping (OS) behavior. The authors view that IFRS adopters exploit the flexibility of IFRS to their advantage and search for auditors that are more likely to give clean opinions. However, auditors may refuse to yield to client pressure for OS, because of the greater potential audit risk under principles-based standards. Design/methodology/approach This study applies a difference-in-differences methodology by using Korean listed firms (i.e. IFRS adopters) as a treatment sample and Korean unlisted firms that do not voluntarily adopt IFRS (i.e. K-GAAP users) as the control sample. OS behavior is measured by the methodology of Lennox (2000). Findings The results of this study show that the OS behavior of IFRS adopters increases after IFRS adoption compared to that of K-GAAP users. This phenomenon is more prevalent when they are audited by non-Big 4 auditors or when they are economically important to auditors. These suggest that the principles-based IFRS without specific rules increase the scope of OS, and auditors tend to accept OS clients by weighing up its costs and benefits. Originality/value This study contributes to the literature on OS by presenting that the approach of accounting standards can be an important influencing factor on a firm’s successful engagement in OS. This finding also provides policy implications for many economies by suggesting mechanisms that can be developed to reduce clients’ opportunistic auditor choices under principles-based accounting standards.
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基于规则与原则的会计准则对意见选择的影响
目的本研究的目的是检验会计准则从基于规则的当地公认会计准则到基于原则的国际财务报告准则的变化是否会影响管理者对有利审计意见、意见购买行为的机会主义审计师选择。作者认为,《国际财务报告准则》的采用者利用了《国际财务报表准则》的灵活性,寻找更有可能发表明确意见的审计师。然而,审计师可能拒绝屈服于客户对OS的压力,因为根据基于原则的标准,潜在的审计风险更大。设计/方法论/方法本研究采用差异法,将韩国上市公司(即IFRS采用者)作为处理样本,将不自愿采用IFRS的韩国非上市公司(即K-GAAP使用者)作为控制样本。操作系统行为是通过Lennox(2000)的方法来衡量的。发现本研究的结果表明,与K-GAAP用户相比,采用IFRS后,采用IFRS的用户的操作系统行为有所增加。当它们由非四大审计师审计时,或者当它们对审计师具有经济重要性时,这种现象更为普遍。这表明,基于原则的IFRS没有具体规则,增加了OS的范围,审计师倾向于通过权衡其成本和收益来接受OS客户。独创性/价值本研究为OS文献做出了贡献,表明会计准则的方法可能是企业成功参与OS的重要影响因素。这一发现还为许多经济体提供了政策启示,提出了可以制定的机制,以减少客户在基于原则的会计准则下的机会主义审计师选择。
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来源期刊
CiteScore
5.40
自引率
13.80%
发文量
45
期刊介绍: The key areas addressed are: ■Audit and Assurance (financial and non-financial) ■Financial and Managerial Reporting ■Governance, controls, risks and ethics ■Organizational issues including firm cultures, performance and development In addition, the evaluation of changes occurring in the auditing profession, as well as the broader fields of accounting and assurance, are also explored. Debates concerning organizational performance and professional competence are also covered.
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