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We investigate the association between business strategy and firm-level tournament incentives in China and find that business strategy is associated with tournament incentives positively. We further find that this positive relationship manifests itself in local, but not central, state-owned enterprises (SOEs). In addition, we also offer some evidence that foreign institutional investors play a moderating role on the positive association between business strategy and tournament incentives. Our study fills a gap in the existing tournament literature by incorporating business strategy as an important determinant of tournament incentives in China. JEL CLASSIFICATION M10; G30; J33 [ABSTRACT FROM AUTHOR]

This study investigates the relationship between gender‐diverse audit committees and audit report lag. We examine a sample of Chinese listed companies during the period 2010–2018 and document a negative relationship between gender‐diverse audit committees and audit report lag. This is consistent with the premise that a gender‐diverse audit committee is able to better monitor the preparation of financial reports, communicate better with auditors in resolving disagreements between management and auditors and facilitate a more efficient audit engagement, thereby shortening the audit report lag. In additional analysis, we find that female audit committee members possessing professional accounting qualifications and accounting work experience are associated with shorter audit report lag. [ABSTRACT FROM AUTHOR]

This paper examines the effect of audit quality on accounting restatements in China. Evidence on the determinants and consequences of accounting restatements in emerging markets is scant, although these countries are more vulnerable to financial report manipulation and subsequent restatements. For accounting restatement analysis we regress non-cash flow restatement observations and cash flow restatement observations on audit quality and restatement–audit quality interaction variables. Earnings manipulation increases the likelihood of non-cash flow restatement observations, but high quality audit constrains this effect. However, no such evidence is found for cash flow restatements. [ABSTRACT FROM AUTHOR]

The audit report lag, defined as the period between a company's fiscal year-end and the audit report date, has been considered to be one of the few externally observable audit output variables allowing outsiders to evaluate audit efficiency. Prior research on the determinants of the audit report lag has investigated a common set of firm characteristics, including firm size, fiscal year-end, loss occurrence, presence of extraordinary items, client complexity, and audit opinion. However, there is scant research on the effect of changes in reporting regulations on the audit report lag. This paper examines empirically the effect on the audit report lag of a new set of Chinese accounting standards introduced in 2007 that were based on the fair value accounting system. We document empirical evidence of a significant increase in the audit report lag in China after the adoption of these new accounting standards. This increase, however, is more pronounced for clients audited by small audit firms. [ABSTRACT FROM AUTHOR]

Abstract: This paper investigates the impact of split-share structure reform on earnings management in China. A unique institutional feature of China was the co-existence of two types of share that endowed all shareholders with equal voting and cash flow rights but different tradability. This split-share structure significantly constrained the tradability of shares that led the Chinese Securities Regulatory Commission to make it mandatory for the conversion of non-tradable shares into tradable shares from 2006 onwards. We investigate whether such a conversion has any effect on information quality through reduced earnings manipulation. We specifically examine the incentives for earnings management during the reform-transition period. A unique feature of the split-share reform has been the requirement for non-tradable share holders to compensate the tradable share holders. We argue that the rational response from the non-tradable share holders would be to pay a lower consideration to tradable share holders by portraying a favorable picture through income-increasing earnings management. We also test for the effect of an increase in tradable shares on earnings management during the reform-transition and post-reform period. [Copyright &y& Elsevier]