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This study investigates the association between interim audits and final audits. The authors focus on whether interim audits affect the audit time lag and the risk of restatement associated with final audits.

Two regression models are established to empirically test if an interim audit helps to reduce the audit time lag and the restatement risk on annual reports based on a sample of Chinese listed firms.

The authors find that performing interim audits helps to reduce the audit time lag. This result suggests that final audits can be completed more efficiently when interim audits are performed during the same period. The authors also find that the decision to audit interim reports is associated with a lower risk of restating annual reports. The lower risk of restatement in turn suggests more effective final audit results.

Together, the results from this study demonstrate that interim audits could benefit final audits, which highlight the value and importance of the continuous auditing.

The purpose of this paper is to examine the association between investor perception management through reporting aggressive pro forma (PF) earnings and earnings management through real activities or by manipulating accruals.

A sample of PF earnings announcements over 2001‐2007 was manually collected from Lexis Nexis, consisting of 4,285 firm‐quarter observations; the aggressiveness of PF earnings reporting was measured by the difference between GAAP earnings and PF earnings.

The paper finds that managers report more aggressively calculated PF earnings numbers if they do not meet their earnings targets or they have limited abilities to manage earnings. Also it was found that the gap between the value relevance of GAAP earnings and PF earnings is smaller for firms with relatively low level of discretionary accruals; this gap is decreased in the post‐Sarbanes Oxley Act period.

This paper has implications for investors and financial analysts by explaining firms' PF earnings reporting behaviours. It also has policy implications for capital market regulators regarding the PF earnings reporting rules.

This paper is the first study to provide evidence that the opportunistic reporting of PF earnings is associated with managerial inability to meet earnings targets through earnings management. It advances our understanding on the PF earnings reporting behaviour.

This study aims to examine whether China's unique dual audit policy affects one specific aspect of audit quality: auditor conservatism. In China, listed companies issuing B/H-shares in addition to A-shares must release two financial reports – one based on Chinese accounting standards and the other based on international accounting standards (ISA). The China Securities Regulatory Commission (CSRC) further requires that the financial reports following Chinese accounting standards should be audited by a domestic CPA firm, and the financial reports following ISA should be audited by an approved overseas CPA firm. This study investigates whether the dual audit requirement induces more auditor conservatism.

Based on a sample of 7,046 firm-year observations that issue A-shares from 2001 to 2006, the authors empirically test whether the dual audit requirement induces more auditor conservatism, measured by the level of discretionary accruals.

The authors find the dual audit requirement significantly restricts the use of income-increasing discretionary accruals but not income-decreasing discretionary accruals. Moreover, financial reporting becomes most conservative when two auditors are from two un-affiliated audit firms. Nevertheless, the difference-in-difference analysis fails to show a significant decrease in auditor conservatism after the revocation of the dual audit rule for the treatment group with dual audit before but no dual audit after 2007 comparing to the control group that experience no change in 2007.

First, the previous studies examine issues regarding the effects of supervision pressure through experimental setting. The authors extend the literature by examining empirically the impact of perceived peer pressure on auditor conservatism. Second, the findings from China regarding the effect of the dual audit system on auditor conservatism serve as a reference for other emerging markets that have not yet established sound audit systems.

The purpose of this paper is to examine whether and how auditors’ and audit clients’ IFRS-related experience alters auditors’ pricing decisions in the initial years of IFRS adoption in China.

The authors conduct the analysis by examining audit fees from 4,129 sample observations that issued A-shares in the Shanghai and Shenzhen stock exchanges from 2005 to 2008. The authors empirically test the association between audit premiums and auditors’ and auditees’ IFRS experience.

The authors find that auditors with IFRS experience charged significantly higher audit premiums in the initial years of IFRS adoption. The authors also find that audit clients’ with IFRS experience paid significantly lower incremental fees. The authors further find that the increased fees charged by audit firms with IFRS experience are independent of the degree of changes in the financial reporting complexity of their clients. In contrast, audit clients with IFRS experience paid lower incremental fees only when they underwent a high degree of changes in financial reporting complexity.

First, it is the understanding that this study is the first to provide evidence on the effect of audit clients’ experience on audit fees. Second, the measure of auditors’ expertise is independent of audit clients’ decisions and is a less noisy measure. Third, the findings complement the existing evidence from other countries regarding the effects of IFRS convergence on audit fees. Finally, this study empirically tests the effects of changes in financial reporting complexity on audit fees.

This research provides accounting-ethics authors and administrators with a benchmark for accounting-ethics research. While Bernardi and Bean (2010) considered publications in business-ethics and accounting’s top-40 journals this study considers research in eight accounting-ethics and public-interest journals, as well as, 34 business-ethics journals. We analyzed the contents of our 42 journals for the 25-year period between 1991 through 2015. This research documents the continued growth (Bernardi & Bean, 2007) of accounting-ethics research in both accounting-ethics and business-ethics journals. We provide data on the top-10 ethics authors in each doctoral year group, the top-50 ethics authors over the most recent 10, 20, and 25 years, and a distribution among ethics scholars for these periods. For the 25-year timeframe, our data indicate that only 665 (274) of the 5,125 accounting PhDs/DBAs (13.0% and 5.4% respectively) in Canada and the United States had authored or co-authored one (more than one) ethics article.