会计
审计
业务
质量审核
审计证据
控制(管理)
审核计划
走查试验
财务审计
内部审计
联合审计
外部审计师
经济
管理
出处
期刊:The Accounting Review
[American Accounting Association]
日期:2021-02-18
卷期号:97 (1): 341-364
被引量:23
标识
DOI:10.2308/tar-2020-0152
摘要
ABSTRACT This study examines whether audit adjustments are a mechanism that links the effect of mandatory internal control audits (MICAs) on financial reporting quality. We argue that the requirement for auditors to publicly disclose internal control weaknesses exacerbated auditor-client conflicts and that this resulted in auditors being less likely to detect (and correct) misstatements in their clients' pre-audit financial statements. Consistent with this argument, we find significant reductions in audit adjustments following the staggered introduction of MICAs using data from China. We find the reductions in audit adjustments are associated with significant increases in material misstatements following the introduction of MICAs. In contrast, we find that the introduction of MICAs led to a significant reduction in material misstatements among clients that did not experience reductions in audit adjustments. Overall, the two effects offset each other, which explains why financial reporting quality did not improve, on average, following the introduction of MICAs.
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