The effect of diversification on auditor selection in business groups: A case from Taiwan

Wen-Ching Chang, Huey-Yeh Lin and Meihua Koo

International Review of Economics & Finance, 2017, vol. 49, issue C, 422-436

Abstract: This study examines effects of group diversification on the number of industry-specialist auditor selections in business groups. Using 2003–2010 Taiwanese business groups as the sample, our results show that unrelated diversification is significantly positively associated with the number of industry-specialist auditor selections in business groups, including audit firms and audit partners. Related diversification is significantly negatively associated with the number of industry-specialist audit partner selections in business groups. Overall, group member firms select different industry-specialist audit firms because of industry diversity and the same industry-specialist audit partners because of industry similarity.

Keywords: Auditor selection; Industry specialist; Business group; Related diversification; Unrelated diversification (search for similar items in EconPapers)
JEL-codes: M42 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:49:y:2017:i:c:p:422-436

DOI: 10.1016/j.iref.2017.03.003

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