Search results

This paper investigates whether the audit fees of Chinese listed firms are associated with the share pledging practice of the firm’s controlling shareholders.

This study uses the audit pricing model to estimate the association between the share pledging of listed firms and audit fees. Cross-sectional analysis is conducted on a large sample of Chinese listed firms during the period 2004 to 2019. The authors further test the moderating effects of listing on the Main Board, state ownership and abnormal audit report lag on the association between share pledging and audit fees. The results remain robust to various endogeneity tests including two-stage least squares instrumental variable analysis, entropy balancing analysis and difference-in-difference analysis.

The study finds that audit fees are positively associated with the proportion of shares pledged by the listed firm’s controlling shareholder in China. The results also provide new evidence that the positive association between audit fees and the share pledging of controlling shareholders could be mitigated if the firm is listed on the Main Board and/or it is a state-owned enterprise. In contrast, pledged firms with abnormal audit report lag are found to have higher audit fees than their pledged counterparts without the excessively long audit delay.

Findings of this study have important practical implications to those charged with governance, as boards need to comprehensively understand the adverse consequences of share pledging when pursuing it as the firm’s major source of financing. The study also has policy implications for stock market regulators such as the China Securities Regulatory Commission in China. Regulators could consider developing a threshold-based share pledging disclosure and pledge ratio requirements based on factors such as a firm’s listing status and ownership structure.

This study provides new evidence on the audit-related consequences of share pledging in a significant capital market. Findings of this study also enrich the existing audit literature by introducing the share pledging activities of controlling shareholders into the audit pricing decision-making model.

Although a substantial body of literature investigates the determinants of audit report lag (ARL), scant empirical evidence exists on the consequences of ARL. The purpose of this paper is to examine the association between abnormally long ARL and future stock price crash risk.

This quantitative study employed a large scale (14,445 firm-year observations) of annual financials, audit and ownership information for the Chinese listed companies during 2002–2013 which were retrieved from the China Stock Market and Accounting Research database.

This study finds evidence that abnormally long ARL increases the risk of a future stock price crash. Furthermore, the study finds that this adverse consequence is more pronounced for firms with a poor internal control environment.

Recently literature started to explore the consequences of abnormal ARL such as going concern audit opinion and restatements in the subsequent periods. This paper reveals that abnormal ARL has consequences for investor wealth losses as well. This is relevant in China, where the ongoing economic growth has attracted, and will continue to attract, a growing body of domestic and international investors. Understanding what factors could expose investors to wealth losses is of paramount importance for allocating their scarce capital.

This study extends the scant literature on the consequences of ARL, and provides useful insights for the Chinese regulatory authorities when considering the appropriateness of the current filing deadline for listed firms.

The COVID-19 global pandemic has caused significant disruptions to the non-profit sector, highlighting the issues that the narrowly focused, traditional conception of governance fails to address. The purpose of this paper is to propose a contingency-based framework with its theoretical underpinnings in the existing literature, in order to support future empirical research on non-profit governance and accountability practices.

From a theoretical perspective, this paper synthesizes relevant existing literature and proposes a contingency-based accountability and governance framework in the non-profit sector. This paper draws on Ostrower and Stone’s (2010) contingency-based framework on boards and Hyndman and McDonnell’s (2009) conception of governance systems. This paper engages with the New Zealand and Australia context while reviewing relevant literature and relevant regulations.

The global pandemic has caused severe worldwide disruptions both socially and economically. There have been dramatic changes to the ways in which non-profit organisations (NPOs) operate. There is an urgent need to understand how such changes in the external environment impact on NPOs’ governance and accountability practices. In this context, the contingency-based accountability and governance framework proposed in this paper has important implications for non-profit research, while opening up an avenue for future research in this field.

This paper does not involve empirical analysis.

This paper contributes by facilitating better understanding on how external contingencies like the COVID-19 global pandemic affect the external and internal environment of an NPO, how they impact on stakeholders and their interplay with an NPO’s governance and accountability systems. It also suggests that regulators of the non-profit sector, umbrella support organisations, and funders proactively encourage and guide NPOs to embrace a wider scope of governance and strengthen the level of governance in the sector.

This paper contributes to the literature by proposing a contingency-based accountability and governance framework in the non-profit sector to support future research in this field. It also sheds light on competing theoretical debates relating to the conceptualisation and operationalization of accountability and governance.

The purpose of this paper is to investigate the funding criteria adopted by funding organisations (FOs) in New Zealand.

The naturalistic inquiry paradigm is applied and qualitative interview data were collected using semi‐structured interviews.

The most important finding is that there is a strong pattern emerging as to how the selected FOs determine the allocation of their funds. Outcomes and key people are important criteria for these FOs, while financial information is regarded as less relevant. On balance, the New Zealand funders involved in this study seem to adopt a creative approach to allocating their funds. To explain the lack of performance and financial measurements, it may be that, unlike their for‐profit counterparts, not‐for‐profit (NFP) organisations' managers are not constrained by returns to shareholders, earnings per share and the bottom line. Thus, many of the New Zealand funders' allocations rely on an instinctive feel for the projects proposed and the character of the applicants proposing them.

A limitation of the research is that it was restricted to Auckland and Wellington and only to those FOs which were willing to participate. It is not possible to generalise the results and apply the findings derived based on seven FOs to all the funders in New Zealand. This research is an exploratory study; further research would be appropriate across Australasia to include larger centres such as Sydney and Melbourne where there are many more FOs.

Funders are in favour of a more creative and soft approach to their philanthropic giving. It is hoped that this research will raise an awareness of a strong tendency of FOs to adopt a creative approach to grant‐making rather than the more scientific approach involving financial analysis.

The outcomes and key people are important to this grant‐making process, while much financial information is less relevant.

The paper recommends that FOs should pay more attention to financial analysis while preserving the flexibility of a creative approach. Moreover, grant seekers will have a much clearer idea about what sort of information most grant makers actually utilise in their grant decision‐making processes. The additional contribution of this research project is to enrich the existing literature on philanthropic funding in New Zealand.