دانلود رایگان مقاله انگلیسی تاثیر استفاده از عنوان تجلیلی در گزارش حسابرسی بر ریسک تحریم های مالی بالاتر - امرالد 2018

Abstract:

From the sociolinguistic perspective, this study examines whether the honorific and actual-name appellations that Chinese auditors use to address clients in audit reports connote differential financial misstatement risk. Specifically, we hypothesize that auditors’ use of honorifics signals their inferior social status relative to their clients, thereby leading to compromised auditor independence, lower audit quality, and higher financial misstatement risk. We find significantly greater financial misstatements, both in terms of likelihoods and magnitudes, for companies addressed by honorifics than for those addressed by actual names. Moreover, compared to auditors’ consistent honorific usage, discretionary honorific usage has a stronger positive association with misstatements. We further show that the positive association between honorific usage and client misstatement risk weakens when the audit firm is a Top 10 accounting firm in China, is an industry specialist, is formed as a partnership, or resides in a more concentrated audit market. This study contributes to the sociolinguistics literature in accounting and provides evidence supporting the reform proposed by the International Auditing and Assurance Standards Board (IAASB) to enhance the usefulness of audit reporting.

6. CONCLUSION

From the sociolinguistic perspective, this study investigates the financial reporting quality implication of auditors’ usage of honorific appellations to address clients in a sample of Chinese audit reports. Sociolinguistic theories suggest that the use of honorific appellations reflects the relative social status of the speaker relative to that of the addressee (Brown and Gilman 1960). Further, the prevalent Confucianism in the Chinese culture emphasizes the seniority of people in higher social status and the submission of people in lower status to people in higher status. We argue that honorifics used in the Chinese audit reports convey information about the lack of power of auditors over clients and their submission to clients, which leads to impaired auditor independence, lower audit quality, and higher client misstatement risk. We find that the use of honorifics is associated with a higher level of financial misstatement risk, i.e., the higher likelihood and magnitude of misstatements. Moreover, discretionary use of honorifics has a stronger effect on financial misstatements than the consistent use of honorifics. We further show that the positive association weakens when the audit firm is a Top 10 accounting firm in China, is an industry specialist, is organized as a partnership, or resides in a more concentrated audit market. Finally, our main results are robust to endogeneity issues as well as alternative measures of misstatement risk and honorific usage.