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Regulatory investigations, media coverage, and audit opinions
Xuelian Li1; Liang Dong2; Hung Wan Kot3; Ming Liu1
2024-03
Source PublicationJournal of International Accounting Auditing and Taxation
ABS Journal Level3
ISSN1061-9518
Volume54Pages:100596
Abstract

After an investigation of an audit engagement is announced, does media coverage of the investigation affect the involved individual auditor’s behaviors in his or her other non-investigated engagements? We examine this question using a sample of Chinese firms. We find that an individual auditor is more likely to issue modified audit opinions in non-investigated engagements if the investigation attracts a high level of media coverage. This augmenting effect of media coverage exists only when the non-investigated firm has an opaque information environment or a relatively high level of earnings management, when the individual auditor is the review auditor or a non-busy auditor, and when the news comes from an opinion leader. Our results suggest that the media can play an effective role in broadening the sphere of influence of regulatory actions.

KeywordAudit Opinion Individual Auditor Media Coverage Regulatory Investigation Spillover Effect
DOI10.1016/j.intaccaudtax.2024.100596
URLView the original
Indexed ByESCI
WOS Research AreaBusiness & Economics
WOS SubjectBusiness, Finance
WOS IDWOS:001164010500001
PublisherELSEVIER, RADARWEG 29, 1043 NX AMSTERDAM, NETHERLANDS
Scopus ID2-s2.0-85182783124
Fulltext Access
Citation statistics
Document TypeJournal article
CollectionFaculty of Business Administration
DEPARTMENT OF ACCOUNTING AND INFORMATION MANAGEMENT
Corresponding AuthorLiang Dong
Affiliation1.Department of Accounting and Information Management, Faculty of Business Administration, University of Macau, Macau, China
2.School of Finance, Hunan University of Technology and Business, Changsha, China
3.CUHK Business School, The Chinese University of Hong Kong, Hong Kong
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Xuelian Li,Liang Dong,Hung Wan Kot,et al. Regulatory investigations, media coverage, and audit opinions[J]. Journal of International Accounting Auditing and Taxation, 2024, 54, 100596.
APA Xuelian Li., Liang Dong., Hung Wan Kot., & Ming Liu (2024). Regulatory investigations, media coverage, and audit opinions. Journal of International Accounting Auditing and Taxation, 54, 100596.
MLA Xuelian Li,et al."Regulatory investigations, media coverage, and audit opinions".Journal of International Accounting Auditing and Taxation 54(2024):100596.
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