Share price response to the SEC administrative proceedings against Chinese auditors
ISSN: 0268-6902
Article publication date: 23 September 2019
Issue publication date: 7 October 2019
Abstract
Purpose
The purpose of this study is to examines whether clients’ share prices responded to three events, including the Securities and Exchange Commission (SEC) launch of administrative proceedings against five Chinese accounting firms on December 3, 2012, for their failure to hand over audit work papers due to conflict of jurisdiction; the issuance of SEC Administrative Law Judge Elliot’s ruling on January 22, 2014; and the settlement of the administrative proceedings on February 6, 2015.
Design/methodology/approach
This study uses the Schipper and Thompson approach.
Findings
It is found that share prices responded negatively around December 3, 2012, for USA-listed Chinese companies who were audited by Chinese auditors.
Originality/value
This study provides evidence on how share prices reacted to SEC enforcement actions against an affair of non-audit failure.
Keywords
Acknowledgements
The authors thank two anonymous referees for helpful comments and suggestions. The authors acknowledge the CPA Canada-CAAA Research Grant and the financial support from Ryerson University and the University of Windsor, and are grateful to Peiyan Li and Flora Zhang for their research assistance.
Citation
Liu, G. and Sun, J. (2019), "Share price response to the SEC administrative proceedings against Chinese auditors", Managerial Auditing Journal, Vol. 34 No. 9, pp. 1131-1148. https://doi.org/10.1108/MAJ-05-2018-1883
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited