Open AccessCEO Power and Auditor Choice
Author(s) -
Bo Ouyang,
Zenghui Liu,
Christine Sun
Publication year - 2015
Publication title -
international journal of finance and banking studies
Language(s) - English
Resource type - Journals
ISSN - 2147-4486
DOI - 10.20525/ijfbs.v4i4.39
Subject(s) - audit , incentive , business , accounting , power (physics) , quality (philosophy) , empirical evidence , auditor independence , quality audit , economics , microeconomics , internal audit , joint audit , philosophy , physics , epistemology , quantum mechanics
In this paper, we examine the impact of CEO power on auditor choice. We are motivated by the competing financial reporting incentives arising from CEO power. Our empirical finding suggests that powerful CEOs are more likely to hire high-quality auditors as a signal of superior financial reporting quality. We contribute to the literature of auditor switch and extend the research on the links between CEO power and firm behaviors.