IDEAS home Printed from https://ideas.repec.org/a/taf/raaexx/v21y2014i2p186-206.html
   My bibliography  Save this article

Positive externality of analyst coverage upon audit services: evidence from China

Author

Listed:
  • Junxiong Fang
  • In-Mu Haw
  • Veicheng Yu
  • Xu Zhang

Abstract

Using China's data, we find that analyst coverage helps reduce audit fees, and such effect is more pronounced for small firms, less-educated auditors, and small auditors. Our findings reveal positive externality of analyst coverage upon audit services in China, especially for those auditors weak in professional expertise, or hard to resist the pressure from their clients. Such evidence implies that the reputation protection hypothesis seems less applicable in an emerging market where the market share of big auditors is low. Our findings also provide alternative evidence justifying exchange-sponsored analyst coverage in practice intended to improve information environment of small firms.

Suggested Citation

  • Junxiong Fang & In-Mu Haw & Veicheng Yu & Xu Zhang, 2014. "Positive externality of analyst coverage upon audit services: evidence from China," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 21(2), pages 186-206, June.
    • Handle: RePEc:taf:raaexx:v:21:y:2014:i:2:p:186-206
    DOI: 10.1080/16081625.2013.854949
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/16081625.2013.854949
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/16081625.2013.854949?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yingwen Deng & Ole‐Kristian Hope & Cyndia Wang & Min Zhang, 2022. "Capital market liberalization and auditors' accounting adjustments: Evidence from a quasi‐experiment," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 49(1-2), pages 215-248, January.
    2. Chunyu Zu, 2023. "The vanishing searches and audit fees: Evidence from Google's withdrawal from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 817-841, April.
    3. Song, Yunling & Wu, Hao & Ma, Yan, 2023. "Does ESG performance affect audit pricing? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 90(C).
    4. Liuyang Ren & Xi Zhong & Liangyong Wan, 2022. "Missing Analyst Forecasts and Corporate Fraud: Evidence from China," Journal of Business Ethics, Springer, vol. 181(1), pages 171-194, November.
    5. Jiandong Chen & Douglas Cumming & Wenxuan Hou & Edward Lee, 2016. "Does the External Monitoring Effect of Financial Analysts Deter Corporate Fraud in China?," Journal of Business Ethics, Springer, vol. 134(4), pages 727-742, April.
    6. Luo, Jin-hui & Dong, Huaili & Liu, Yue, 2023. "Does high cash compensation compromise the independence of outside directors? Evidence from directors' dissenting votes in China," Pacific-Basin Finance Journal, Elsevier, vol. 78(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:raaexx:v:21:y:2014:i:2:p:186-206. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/raae20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.