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Social trust and the client-auditor mismatch relationship

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DOI: 10.23977/accaf.2024.050114 | Downloads: 6 | Views: 207

Author(s)

Weiwen Liu 1

Affiliation(s)

1 College of Management, Sichuan Agrircultural University, Chengdu, China

Corresponding Author

Weiwen Liu

ABSTRACT

This paper examines the relationship between social trust and the demand for high-quality audits of listed companies from the perspective of informal system, taking A-share listed companies in China as a sample from 2010 to 2019. The findings social trust level is higher when the client company and auditor are more inclined to show an upward mismatch relationship. The above findings remain robust after replacing key variables and overcoming endogeneity issues. This paper enriches the research on the economic consequences of social trust and the factors influencing auditor choice, and is instructive in revealing the role of informal institutions in corporate governance and in improving audit oversight governance.

KEYWORDS

Social trust, client-auditor mismatch, no actual controller

CITE THIS PAPER

Weiwen Liu, Social trust and the client-auditor mismatch relationship. Accounting, Auditing and Finance (2024) Vol. 5: 99-103. DOI: http://dx.doi.org/10.23977/accaf.2024.050114.

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