創新與管理 SAMPLE PAPER FORMAT
Journal of Innovation and Management
Controlling Shareholders and Audit Quality
Tsui Chih Wu[*]
Department of Accounting, Shih Chien University.
Mushang Lee
Department of Accounting, Chinese Culture University.
Abstract
High ownership concentration is a feature of publicly listed companies in Taiwan. Through concentrated ownership, major decision rights remain in the hands of controlling shareholders, thus,……
Keywords: audit quality, corporate governance
1. Introduction
In publicly-listed companies of most countries, agency problems do not exist between the company governing authority and external shareholders, but are derived from the conflict of interest between controlling shareholders and external shareholders (Shleifer and Vishny 1997)……
2. Literature Review and Research hypothesis
Jensen and Meckling (1976) point out that, when shareholding ratio of the owner manager is higher, there will be less behaviors of the company governing authority such as privileged consumption…
In sum, the cash flow rights of controlling shareholders may be related to audit quality negatively or positively. In this study, without predicting the relational nature, the hypothesis is proposed as follows:
H1: Controlling shareholders’ cash flow rights are related to audit quality.
According to review of presently available literature, the possible effects of divergence level between controlling rights from cash flow rights on audit quality may vary. Claessens et al. (2000),……
H2: The divergence level between the controlling shareholder voting rights and cash flow rights is related to audit quality.
Most publicly-listed companies in the US set up audit committee responsible for the appointment of accountants, communication of auditing work, financial monitoring and review of internal control……
H3: Controlling shareholders’ board seat rights are related to audit quality.
3. Research Method
This paper samples publicly-listed companies in Taiwan from 1996 to 2008 with data taken from Taiwan Economic Journal (TEJ),…… The following logic regression model is as follows:
Y=β0+β1 U C+β2 AUDIT+β3 Zscore +β4 MKRVAL +β5 SIZE+ε
4. Empirical Results
4.1 Descriptive statistics
The samples are compared in group according to dependent variables individually and summed up in Table 1……
4.2 Logistic regression analysis
Table 2 uses avoidance of reporting a loss to represent audit quality. The results of Model 1 suggest that the bigger VC is, ……
4.3 Types of accounting firms and the impact of Sarbanes-Oxley Act
The above empirical results suggest that controlling shareholders have significant positive or negative impact on audit quality……
4.4 Weakening effect of promulgation of Sarbanes-Oxley Act by major accounting firms
In this section,……
Y=β0+β1UC +β2 UC _AUDIT_Y2001 +β3 Zscore +β4 MKRVAL +β5 SIZE+ε
5. Conclusions
The relevance……
References
Bricker, R. (2002) Transparency, independence, technology and the CPA scope of services: New challenges to the profession. The Ohio CPA Journal (April-June), 48-50.
Carcello, J.V., Neal, T.L. (2000) Audit committee composition and auditor reporting. Accounting Review 75, 453-467.
Chi, T.C., Lu, H.T. (2007) Independence of company board directors and supervisors and types of accounting firms: The impact on presenting concerned opinions on business continuity by accountants. Review of Financial Management, 3(3), 61-79.
Chi, T.C., Lu, H.T. (2008) The impact on presenting concerned opinions on business continuity by accountants of shareholding structure and the independence of company board directors and supervisors. 2008 Accounting Symposium, Chinese Culture University.
Chung, S.M., Liu, Y.C., Yeh, K.S. (2003) A discussion on the relationship between family control and board operation of publicly-listed companies in Taiwan. Sun Yat-Sen Management Review, 11(2), 341-365.
Claessens, S., Djankov, S., Lang, L. (2000) The separation of ownership and control in East Asia corporations. Journal of Financial Economics, 58, 81-112.
Fan, P.H. (1999) Roots of Asia crash sought in corporate performance. Asian Wall Street Journal, March 12-13.
Yeh, Y.H., Li, T.C., Ke, C.E. (2002) Corporate Governance and Rating System. Sunbright, Taipei.
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創新與管理 SAMPLE PAPER FORMAT
Journal of Innovation and Management
Table 1. Descriptive statistics
Table 2. Logistic regression analysis
Table 3. Additional analysis –types of accounting firms and impact of Sarbanes-Oxley Act
Table 4. Additional analysis -- the weakening impact of major accounting firms after the promulgation of Sarbanes-Oxley Act
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