Goodwill impairment, auditor dismissal and opinion shopping–evidence from China

Autor:	Cunyu Xing, Huilan Yuwen, Dan Yang
Jazyk:	angličtina
Rok vydání:	2023
Předmět:	Goodwill impairment opinion shopping auditor dismissal agency cost Accounting. Bookkeeping HF5601-5689 Finance HG1-9999
Zdroj:	China Journal of Accounting Studies, Vol 11, Iss 4, Pp 864-896 (2023)
Druh dokumentu:	article
ISSN:	21697213 2169-7221 2169-7213
DOI:	10.1080/21697213.2023.2239672
Popis:	ABSTRACTUsing listed companies from 2010 to 2019 in China, we investigate whether firms engage in opinion shopping activities when firms dismiss the auditors following a goodwill impairment. We find that firms tend to dismiss the incumbent auditors after receiving a goodwill impairment opinion and engage in opinion shopping with their successor auditors. Furthermore, the successor’s auditor quality is similar to the predecessor’s audit quality following a dismissal. Moreover, firms with low-quality internal control system and low analyst coverage level are more motivated to engage in opinion shopping subsequently after receiving a goodwill impairment opinion. Our findings would be of interest to corporate governance activists, auditors, investors and regulators.
Databáze:	Directory of Open Access Journals
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