Accounting Commons^™

How Do Institutions Affect Auditor Reporting Behavior? Empirical Evidence From China, Yang An

Theses & Dissertations

It is well documented in cross-country research that institutions, both economic and political, affect the reporting behavior of auditors and audit services. These findings are based on the assumption that institutions vary across countries but are more homogeneous within a country. However, cross-country research suffers from the problems of country-specific cultures, accounting rules, and regulations, and can be criticized for the use of small sample sizes, potential endogeneity, and the correlation of omitted variables. This study overcomes these problems by engaging in within-country research. Specifically, this study examines how variations in the institutional environment within China affect auditor reporting behavior. …