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Article: Financial statement frauds and auditor sanctions: An analysis of enforcement actions in China

TitleFinancial statement frauds and auditor sanctions: An analysis of enforcement actions in China
Authors
KeywordsAudit failure
Audit quality
Auditor responsibility
Auditor sanction
Fraud type
Issue Date2005
PublisherSpringer Verlag Dordrecht. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0167-4544
Citation
Journal Of Business Ethics, 2005, v. 62 n. 4, p. 367-381 How to Cite?
AbstractThe rising tide of corporate scandals and audit failures has shocked the public, and the integrity of auditors is being increasingly questioned. It is crucial for auditors and regulators to understand the main causes of audit failure and devise preventive measures accordingly. This study analyzes enforcement actions issued by the China Securities Regulatory Commission against auditors in respect of fraudulent financial reporting committed by listed companies in China. We find that auditors are more likely to be sanctioned by the regulators for failing to detect and report material misstatement frauds rather than disclosure frauds. Further analysis of the material misstatements indicates that auditors are more likely to be sanctioned for failing to detect and report revenue-related frauds rather than assets-related frauds. In sum, our results suggest that regulators believe auditors have the responsibility to detect and report frauds that are egregious, transaction-based, and related to accounting earnings. The results contribute to our knowledge of auditors' responsibilities for detecting frauds as perceived by regulators. © Springer 2005.
Persistent Identifierhttp://hdl.handle.net/10722/85943
ISSN
2015 Impact Factor: 1.837
2015 SCImago Journal Rankings: 1.358
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorFirth, Men_HK
dc.contributor.authorMo, PLLen_HK
dc.contributor.authorWong, RMKen_HK
dc.date.accessioned2010-09-06T09:11:01Z-
dc.date.available2010-09-06T09:11:01Z-
dc.date.issued2005en_HK
dc.identifier.citationJournal Of Business Ethics, 2005, v. 62 n. 4, p. 367-381en_HK
dc.identifier.issn0167-4544en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85943-
dc.description.abstractThe rising tide of corporate scandals and audit failures has shocked the public, and the integrity of auditors is being increasingly questioned. It is crucial for auditors and regulators to understand the main causes of audit failure and devise preventive measures accordingly. This study analyzes enforcement actions issued by the China Securities Regulatory Commission against auditors in respect of fraudulent financial reporting committed by listed companies in China. We find that auditors are more likely to be sanctioned by the regulators for failing to detect and report material misstatement frauds rather than disclosure frauds. Further analysis of the material misstatements indicates that auditors are more likely to be sanctioned for failing to detect and report revenue-related frauds rather than assets-related frauds. In sum, our results suggest that regulators believe auditors have the responsibility to detect and report frauds that are egregious, transaction-based, and related to accounting earnings. The results contribute to our knowledge of auditors' responsibilities for detecting frauds as perceived by regulators. © Springer 2005.en_HK
dc.languageengen_HK
dc.publisherSpringer Verlag Dordrecht. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0167-4544en_HK
dc.relation.ispartofJournal of Business Ethicsen_HK
dc.subjectAudit failureen_HK
dc.subjectAudit qualityen_HK
dc.subjectAuditor responsibilityen_HK
dc.subjectAuditor sanctionen_HK
dc.subjectFraud typeen_HK
dc.titleFinancial statement frauds and auditor sanctions: An analysis of enforcement actions in Chinaen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0167-4544&volume=62 &issue=No 4&spage=367&epage=381&date=2005&atitle=Financial+Statement+Frauds+And+Auditor+Sanctions:+An+Analysis+Of+Enforcement+Actions+In+Chinaen_HK
dc.identifier.emailWong, RMK: raymond@business.hku.hken_HK
dc.identifier.authorityWong, RMK=rp01113en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1007/s10551-005-0542-4en_HK
dc.identifier.scopuseid_2-s2.0-29144463808en_HK
dc.identifier.hkuros120226en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-29144463808&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume62en_HK
dc.identifier.issue4en_HK
dc.identifier.spage367en_HK
dc.identifier.epage381en_HK
dc.identifier.isiWOS:000233868500005-
dc.publisher.placeNetherlandsen_HK
dc.identifier.scopusauthoridFirth, M=7006574464en_HK
dc.identifier.scopusauthoridMo, PLL=7004521686en_HK
dc.identifier.scopusauthoridWong, RMK=36812012400en_HK
dc.identifier.citeulike437552-

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