An empirical study on opinion shopping in Taiwan
Date Issued
2006
Date
2006
Author(s)
Wu, Wen-Yen
DOI
en-US
Abstract
Since several companies involved in financial scandals received unqualified audit opinion before they went into trouble, one might suspect if it’s correlated with “opinion shopping” phenomenon. This paper attempts to examine if the companies in Taiwan are successfully engaged in audit opinion shopping.
While most previous literature focuses on the improvement of the opinions received by companies after auditor switch, my study follows Lennox (2000) to improve previous research methods, and employ audit-reporting and auditor-switching models to examine this issue. The sample included all public companies listed in Taiwan Stock Exchange and Traded over the counter in Taiwan from 1998 to 2004.
There are two key findings: First, switching auditors increases the probabilities of receiving qualified audit opinion. Second, although the predicted sign is correct, the coefficient on opinion-shopping variable is not significant. The above findings provide preliminary evidence that there exists no opinion shopping in Taiwan.
Subjects
購買審計意見
審計意見
opinion shopping
auditor switch
audit report
Type
other
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