Qihui Gong , Huilong Liu , Jing Xie , Lingling Zhang
{"title":"设立分支机构如何影响审计质量?来自中国的证据","authors":"Qihui Gong , Huilong Liu , Jing Xie , Lingling Zhang","doi":"10.1016/j.jaccpubpol.2022.107049","DOIUrl":null,"url":null,"abstract":"<div><p>Establishing a branch office may improve audit quality for an audit firm’s existing clients in the same region as the newly established branch by relieving time and financial resource constraints (i.e., the input channel) and reducing information asymmetry between auditors and clients (i.e., the information channel). Conversely, it may reduce audit quality by undermining audit independence (i.e., the audit independence channel). We test these conjectures using data on Chinese listed firms from 2001 to 2019 and the propensity score matching–difference-in-differences method. Our results show that establishing a branch office improves audit quality, and they remain robust to a series of alternative measures for audit quality. Further analyses indicate that the positive effect of establishing a branch office on audit quality is primarily achieved through the information channel. In addition, we find a knowledge transfer effect from the newly established branch to non-local branches within an audit firm. Moreover, establishing a branch office can benefit both auditors and clients because it leads to the provision of higher quality audit services in less time without audit fee increases compared with the situation without the branch office. Our study contributes to the related literature and is of interest to regulators and practitioners.</p></div>","PeriodicalId":48070,"journal":{"name":"Journal of Accounting and Public Policy","volume":null,"pages":null},"PeriodicalIF":3.3000,"publicationDate":"2023-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":"{\"title\":\"How does establishing a branch office affect audit quality? Evidence from China\",\"authors\":\"Qihui Gong , Huilong Liu , Jing Xie , Lingling Zhang\",\"doi\":\"10.1016/j.jaccpubpol.2022.107049\",\"DOIUrl\":null,\"url\":null,\"abstract\":\"<div><p>Establishing a branch office may improve audit quality for an audit firm’s existing clients in the same region as the newly established branch by relieving time and financial resource constraints (i.e., the input channel) and reducing information asymmetry between auditors and clients (i.e., the information channel). Conversely, it may reduce audit quality by undermining audit independence (i.e., the audit independence channel). We test these conjectures using data on Chinese listed firms from 2001 to 2019 and the propensity score matching–difference-in-differences method. Our results show that establishing a branch office improves audit quality, and they remain robust to a series of alternative measures for audit quality. Further analyses indicate that the positive effect of establishing a branch office on audit quality is primarily achieved through the information channel. In addition, we find a knowledge transfer effect from the newly established branch to non-local branches within an audit firm. Moreover, establishing a branch office can benefit both auditors and clients because it leads to the provision of higher quality audit services in less time without audit fee increases compared with the situation without the branch office. Our study contributes to the related literature and is of interest to regulators and practitioners.</p></div>\",\"PeriodicalId\":48070,\"journal\":{\"name\":\"Journal of Accounting and Public Policy\",\"volume\":null,\"pages\":null},\"PeriodicalIF\":3.3000,\"publicationDate\":\"2023-11-01\",\"publicationTypes\":\"Journal Article\",\"fieldsOfStudy\":null,\"isOpenAccess\":false,\"openAccessPdf\":\"\",\"citationCount\":\"0\",\"resultStr\":null,\"platform\":\"Semanticscholar\",\"paperid\":null,\"PeriodicalName\":\"Journal of Accounting and Public Policy\",\"FirstCategoryId\":\"91\",\"ListUrlMain\":\"https://www.sciencedirect.com/science/article/pii/S0278425422001120\",\"RegionNum\":3,\"RegionCategory\":\"管理学\",\"ArticlePicture\":[],\"TitleCN\":null,\"AbstractTextCN\":null,\"PMCID\":null,\"EPubDate\":\"\",\"PubModel\":\"\",\"JCR\":\"Q1\",\"JCRName\":\"BUSINESS, FINANCE\",\"Score\":null,\"Total\":0}","platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Accounting and Public Policy","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0278425422001120","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
How does establishing a branch office affect audit quality? Evidence from China
Establishing a branch office may improve audit quality for an audit firm’s existing clients in the same region as the newly established branch by relieving time and financial resource constraints (i.e., the input channel) and reducing information asymmetry between auditors and clients (i.e., the information channel). Conversely, it may reduce audit quality by undermining audit independence (i.e., the audit independence channel). We test these conjectures using data on Chinese listed firms from 2001 to 2019 and the propensity score matching–difference-in-differences method. Our results show that establishing a branch office improves audit quality, and they remain robust to a series of alternative measures for audit quality. Further analyses indicate that the positive effect of establishing a branch office on audit quality is primarily achieved through the information channel. In addition, we find a knowledge transfer effect from the newly established branch to non-local branches within an audit firm. Moreover, establishing a branch office can benefit both auditors and clients because it leads to the provision of higher quality audit services in less time without audit fee increases compared with the situation without the branch office. Our study contributes to the related literature and is of interest to regulators and practitioners.
期刊介绍:
The Journal of Accounting and Public Policy publishes research papers focusing on the intersection between accounting and public policy. Preference is given to papers illuminating through theoretical or empirical analysis, the effects of accounting on public policy and vice-versa. Subjects treated in this journal include the interface of accounting with economics, political science, sociology, or law. The Journal includes a section entitled Accounting Letters. This section publishes short research articles that should not exceed approximately 3,000 words. The objective of this section is to facilitate the rapid dissemination of important accounting research. Accordingly, articles submitted to this section will be reviewed within fours weeks of receipt, revisions will be limited to one, and publication will occur within four months of acceptance.