Abstract
This study examines whether firms' auditor choice relates to Board ethics for forty-six countries around the globe. Using a large sample of firms (132,853 firm year
observations) and controlling for a number of firm- and country-level factors, we find that firms in countries where "high board ethical values" prevail are more likely to hire a Big 4 auditor. We also document that the relation between board ethical values and auditor choice is mitigated by the firm's board size. These results establish an indirect link between board ethics and financial reporting quality through the firm's choice of auditor.
observations) and controlling for a number of firm- and country-level factors, we find that firms in countries where "high board ethical values" prevail are more likely to hire a Big 4 auditor. We also document that the relation between board ethical values and auditor choice is mitigated by the firm's board size. These results establish an indirect link between board ethics and financial reporting quality through the firm's choice of auditor.
| Original language | English |
|---|---|
| Pages (from-to) | 1-36 |
| Number of pages | 36 |
| Journal | Research in Accounting Regulation |
| Volume | 27 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2010 |
| Event | Accounting and Finance Association of Australia and New Zealand (AFAANZ) conference - Darwin, Darwin, Australia Duration: 3 Jul 2011 → 5 Jul 2011 http://www.afaanz.org/conferences |