Positive spillover effect and audit quality: a study of cancelling China’s dual audit system

Rui Zhang; Raymond M. K. Wong; Gaoliang Tian; Mohan M.  Fonseka

doi:10.1111/acfi.12563

Positive spillover effect and audit quality: a study of cancelling China’s dual audit system

Rui Zhang, Raymond M. K. Wong, Gaoliang Tian^*, Mohan M. Fonseka

^*Corresponding author for this work

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

5 Citations (Scopus)

Abstract

The mandatory dual-audit and dual-reporting system (DADRS) for mainland Chinese firms cross-listed in Hong Kong (AH firms) was abolished in 2010. This study quantifies a positive spillover effect from Hong Kong-based auditors in the DADRS and examines whether and to what extent this affects the audit quality of AH firms. We find that AH firms exposed to a stronger positive spillover effect have higher audit quality, and the loss of this effect drives the declining audit quality of AH firms after they cancelled the DADRS. This study is among the first empirical works on this research topic.

Original language	English
Pages (from-to)	205-239
Journal	Accounting and Finance
Volume	61
Issue number	1
Online published	10 Nov 2019
DOIs	https://doi.org/10.1111/acfi.12563
Publication status	Published - Mar 2021

Bibliographical note

Research Unit(s) information for this publication is provided by the author(s) concerned.

Research Keywords

Audit quality
Cross-listing
China
Dual audit
Positive spillover

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AU - Tian, Gaoliang

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KW - Positive spillover

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Positive spillover effect and audit quality: a study of cancelling China’s dual audit system

Abstract

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Research Keywords

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