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This study examines the stealth opinion shopping phenomenon in China. We find as compared to an outright switch of audit firm to achieve opinion shopping, client firms may simply switch audit partners without switching the audit firm. Previous studies argue that opinion shopping may not be successful; our study provides evidence that client firms do achieve opinion shopping through switching audit partners, in the setting of Chinese institutional environment. We also find that opinion shopping at the audit partner level is associated with audit firm size, the regulation intensity and the client importance. In addition to contributing to the existing opinion shopping literature, our study also contributes to studies on individual auditor characteristics. We find that conservative auditors are more likely to be replaced by less conservative auditors in the opinion shopping process. Consistent with opinion shopping, we also find that the engagement partners (junior partners) rather than review partners (senior partners) are more likely to be replaced.
Feng Chen, University of Toronto
Songlan Peng, York University
Shuang Xue, Shanghai University of Finance and Economics
Zhifeng Yang, City University of Hong Kong
Feiteng Ye, Shanghai Lixin University of Commerce