 Auditors' going Concern Reporting in the pre- and post-bankruptcy Law Eras: Chinese Affiliates of Big 4 Versus Local AuditorsPhyllis L.L. Mo, Oliver Rui and Xi Wu () The International Journal of Accounting, 2015, vol. 50, issue 1, 1-30 Abstract: Unlike the situation in most developed countries, before the enactment of China's 2006 Bankruptcy Law it was difficult for Chinese-listed companies, which were mostly government owned, to declare bankruptcy. Our analysis of a sample of Chinese financially-distressed companies from 2001 to 2010 reveals that the Chinese affiliates of Big 4 auditors had a higher propensity to issue going concern (GC) reports than local auditors not only in the post-law period, but also in the pre-law period. This finding suggests that Big 4 auditors had incentives to maintain their reputations even when the clients' bankruptcy risk was low. We also find that there was a significant increase in local top-10 auditors' GC reporting propensity in the post-law period, which is consistent with the notion that the increased litigation/regulation risk due to the enactment of Bankruptcy Law has an effect on local large auditors. Keywords: Bankruptcy Law; Chinese affiliates of Big 4 auditors; Local auditors; Going concern opinions (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:50:y:2015:i:1:p:1-30 DOI: 10.1016/j.intacc.2014.12.005 Access Statistics for this article The International Journal of Accounting is currently edited by A. R. Abdel-Khalik More articles in The International Journal of Accounting from Elsevier |
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