Topic: The Effect of Public Firm Audit Regulation on Private Firm Auditing: Audit-Partner-Level Evidence

Speaker: Yao Liu

Date & Time: 8:00-9:30 Monday, October 9, 2023

Venue: Tencent Meeting (Meeting ID: 576 690 570)

Organizers: School of Accounting, Dongbei University of Finance and Economics, P.R. China & Liaoning Capital Market Finance and Accounting Graduate Innovation and Academic Exchange Center

Abstract:

Using partner-level data on audit adjustments for public firms and audit-opinion data for private firms, we study whether and how public firm audit regulation impacts audit partners’ private firm auditing practices. We exploit a regulation in China that applies only to public firm auditing and aims to increase transparency and rigor in audit procedures. Following the implementation of the regulation, audit partners issue more modified opinions for private firms. We explore two potential mechanisms through which audit partners treat private clients less leniently: knowledge transfer and increased professional skepticism. We find suggestive evidence consistent with both mechanisms. Collectively, our paper demonstrates that public audit regulations can have a positive spillover on private firms through audit partners.

Introduction of Speaker:

Lisa Yao Liu, assistant professor of accounting at Columbia Business School. Professor Yao Liu obtained a PhD and a Master's degree in Business Administration from the University of Chicago Booth School of Business, as well as a Master's degree in Economics from Duke University and a Bachelor's degree in Business Administration from Renmin University of China. Her research interests include information disclosure, auditing, technology and innovation. Multiple research results have been published in international top journals such as Journal of Accounting and Economics, Journal of Accounting Research, etc. Related papers have been reported multiple times in journal conferences, such as Journal of Accounting Research Conference, Journal of Accounting and Economics Conference, Journal of Accounting Research Registered Report Conference, etc.

Special Attention:

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