Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338444 
Year of Publication: 
2021
Citation: 
[Journal:] China Journal of Accounting Studies (CJAS) [ISSN:] 2169-7221 [Volume:] 9 [Issue:] 1 [Year:] 2021 [Pages:] 81-112
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
Using data of Chinese A-share non-financial listed companies spanning years 2003-2018, we examine whether a firm's business strategy that deviates from industry conventions influences corporate governance mechanisms, particularly the probability of choosing high-quality external auditors. We document a significantly positive correlation between a firm's strategic deviance and high-quality auditor engagement. The exacerbation of agency conflict is an important driver for firms with strategic deviance to hire high-quality auditors. Moreover, we find evidence that hiring Big 4 auditors can curb earnings management and capital occupation of major shareholders in firms with a deviant strategy. We conclude that strategically deviant firms hire high-quality auditors due to agency conflicts.
Subjects: 
Strategic deviance
auditor selection
agency costs
legitimacy
high-quality auditor
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.