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Full-Text Articles in Business
Audit Firms And Disclaimers: Is The Bar Set Too Low?, Keith Hooper, Jing Wang
Audit Firms And Disclaimers: Is The Bar Set Too Low?, Keith Hooper, Jing Wang
Faculty of Business - Papers (Archive)
This paper makes the case for the greater regulation of auditors. It argues that the courts are too sympathetic to the use of disclaimers to escape liability to investors, individual shareholders and third parties. The approach is to review the relevant court cases which established the concept of "opinions" and disclaimers as a means of protection and argue for greater recognition of the wider impact of the audit role. The paper finds that the best explanation as to why auditors use disclaimers is Social Darwinism. The application of professional ethics as adumbrated in various codes is not relevant to this …
Corporate Opacity And Cost Of Debt For Family Firms, Liangbo Ma, Shiguang Ma, Gary G. Tian
Corporate Opacity And Cost Of Debt For Family Firms, Liangbo Ma, Shiguang Ma, Gary G. Tian
Faculty of Business - Papers (Archive)
This paper uses a sample of Chinese firms to examine the impact of corporate opacity on the relationship between family control and firms' cost of debt. We find that family control is associated with a lower cost of debt on average, and a negative impact exists mainly in firms with relatively low corporate opacity. We further provide evidence that the moderating effect of corporate opacity becomes more pronounced when investors' perception of controlling families' moral hazard of expropriation is higher. Our results are robust to alternative opacity proxies and controlling for endogeneity of family control using the instrumental variable method. …