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Article
Publication date: 9 December 2020

Yuqiang Cao, Zhuoan Feng, Meiting Lu and Yaowen Shan

This paper aims to provide a critical discussion of the application of the research pitching template developed by Professor Robert Faff to a research topic of tax avoidance and…

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Abstract

Purpose

This paper aims to provide a critical discussion of the application of the research pitching template developed by Professor Robert Faff to a research topic of tax avoidance and firm risk. This letter provides a brief commentary on using the pitching template and discusses personal reflections on the pitching process.

Design/methodology/approach

This pitching research letter applies Faff’s pitching template and provides a critical commentary of the pitching process.

Findings

The team found that Faff’s pitching template is a valuable tool for conceiving research ideas. It helped the authors to identify, develop and articulate key aspects of the project. Further, they believe that completing the template was a beneficial and rewarding exercise, especially for early-career researchers.

Originality/value

This pitching research letter is tied to the team’s research idea that was pitched at the 2020 AFAANZ “Shark Tank” event. It provides original commentary on the use of Faff’s pitching template. It is not meant to retrofit published papers.

Details

Accounting Research Journal, vol. 34 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 18 May 2022

Zhuoan Feng, Lina Zixuan Li, Hau Yan Wong and Jilnaught Wong

This paper aims to examine how auditors respond through audit fees and audit quality following disciplinary actions imposed by audit regulators in an emerging market setting.

Abstract

Purpose

This paper aims to examine how auditors respond through audit fees and audit quality following disciplinary actions imposed by audit regulators in an emerging market setting.

Design/methodology/approach

This paper uses the disciplinary actions in 2017 against two major audit firms in China as an exogenous shock to examine the effect of tougher enforcement actions on auditor behavior as reflected in their emended audit fees and audit quality. This paper sampled from publicly listed firms in China with requisite data for the period 2015 through 2018. Using a difference-in-differences model, this paper examines whether the enforcement action (i.e. the suspension of audit firms) significantly impacted the audit fees and audit quality for clients of the disciplined audit firms (hereafter, suspended audit firms) in the two-year period postsuspension relative to audit firms that were not disciplined (hereafter, nonsuspended audit firms).

Findings

This paper finds evidence of increased audit fees and improved audit quality by the suspended audit firms relative to the nonsuspended audit firms in the two-year period postsuspension. These findings suggest that in contrast to symbolic disciplinary actions such as public censures documented in prior literature (Boone et al.,2015), tougher punitive disciplinary actions are followed by an increase in audit fees and an improvement in audit quality by the suspended audit firms. This paper also finds that the deterrent effect from the audit firm suspension is exclusive to the penalized audit firms and had no positive spillover effects on their peers.

Research limitations/implications

A limitation of this study is the focus on the effect of audit firm suspension against two large local audit firms in China. Given the unique characteristics of the Chinese audit market and the Chinese regulatory environment, our findings may not be generalizable to audit firms in other countries and jurisdictions, especially where the audit market is dominated by the international Big 4 auditors that possess greater brand name capital than second-tier local audit firms.

Originality/value

This paper provides novel evidence on the impact of strengthened enforcement on auditor behavior in an emerging market setting. This paper contributes to the existing literature examining the impact of regulatory interventions on financial reporting outcomes and audit quality. While there is evidence on how regulations affect financial statement preparers’ demand for high audit quality, there is limited research on how regulatory interventions affect auditor’s incentive to supply higher audit quality. This paper also contributes to the scant existing evidence on the effect of disciplinary actions against audit firms in emerging economies.

Details

Meditari Accountancy Research, vol. 31 no. 5
Type: Research Article
ISSN: 2049-372X

Keywords

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