دانلود رایگان مقاله انگلیسی تعیین کننده ها و ارزیابی بازار تصمیم گیری برای حسابرسی یا بررسی: شواهد از تایوان - الزویر 2017

Abstract

Using observations of public companies in Taiwan between 2008 and 2012, this study examines the determinants of demand for different assurance services from the perspectives of agency cost, information need, and quality of corporate governance. Our results indicate that the demand for audit assurance is higher in the presence of higher agency costs between controlling and non-controlling shareholders and higher agency costs of debts. We also find that companies with stronger capital need are more likely to have their interim financial statements audited. The quality of corporate governance is found to have a positive effect on the decision to choose audit assurance. Finally, our empirical results demonstrate audited information is more value relevant than reviewed information. This suggests that firms can potentially enjoy benefits from audited information as the market will rely more on their financial information in making investment-related decisions.

VI. Conclusions

To protect investors’ interest, public corporations’ external financial reporting is subject to regulatory requirements in major capital markets. The regulation is often restrictive and provides little option for companies to make decisions regarding their public reporting obligations. In this study, we take the advantage of the institutional environment in Taiwan to examine public companies’ behavior when both audits and reviews were permissible options for interim financial reports. Our results indicate that the demand for audit assurance is higher in the presence of higher agency costs between controlling and non-controlling shareholders and higher agency costs of debts. Agency costs between shareholders and managers do not have similar positive effects on a company’s decision to audit. We also find that companies with stronger capital need are more likely to have their interim financial statements audited. This result is in line with the information hypothesis that companies choose a higher assurance level to enhance the credibility of their financial information. The quality of corporate governance is found to have a positive effect on the decision to choose audit assurance. We also examine the differences in value relevance between audited and reviewed financial information. Our results indicate that audited information receives a higher weight in market valuation. This suggests that firms can potentially enjoy benefits from audited information as the market will rely more on their financial information in making investment-related decisions.