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Market competitive strategy, government ownership and audit firm choice: evidence from China

Many serious audit failures of listed companies, mainly in China, have spotlighted the suitability of the appointed audit firm with the companies’ market competitive strategy. This study argues that the adopted market competitive strategy, either offensive or defensive, may influence audit firm...

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Main Authors: Zheng Wei,, Mohd Mohid Rahmat,
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2023
Online Access:http://journalarticle.ukm.my/22807/1/pengurusan_68_11.pdf
http://journalarticle.ukm.my/22807/
https://www.ukm.my/jurnalpengurusan/volume-main/jurnal-pengurusan/
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spelling my-ukm.journal.228072024-01-04T04:54:18Z http://journalarticle.ukm.my/22807/ Market competitive strategy, government ownership and audit firm choice: evidence from China Zheng Wei, Mohd Mohid Rahmat, Many serious audit failures of listed companies, mainly in China, have spotlighted the suitability of the appointed audit firm with the companies’ market competitive strategy. This study argues that the adopted market competitive strategy, either offensive or defensive, may influence audit firm choice, but the associations remain unclear. This study investigates the association between market competitive strategy and audit firm choice among Chinese listed companies, with government ownership as a moderator. A logistic multivariate regression analysis was conducted by using 9,590 year-observations of Chinese-listed companies during the period of 2018–2021. Results show that companies with aggressive offensive strategies tend to appoint larger audit firms, whereas companies with aggressive defensive strategies favour smaller audit firms. No evidence shows that government-owned companies influence audit firm choice, but government ownership moderates the relationship between market competitive strategies and audit firm choice. The findings are useful for listed companies to select the best audit quality that fits with the adopted market competitive strategy and provide references for regulators to assess and promote the healthy development of China’s audit market. This work is a pioneer in providing associations among market competitive strategy, government ownership and audit firm choice Penerbit Universiti Kebangsaan Malaysia 2023 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/22807/1/pengurusan_68_11.pdf Zheng Wei, and Mohd Mohid Rahmat, (2023) Market competitive strategy, government ownership and audit firm choice: evidence from China. Jurnal Pengurusan, 68 . pp. 1-13. ISSN 0127-2713 https://www.ukm.my/jurnalpengurusan/volume-main/jurnal-pengurusan/
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description Many serious audit failures of listed companies, mainly in China, have spotlighted the suitability of the appointed audit firm with the companies’ market competitive strategy. This study argues that the adopted market competitive strategy, either offensive or defensive, may influence audit firm choice, but the associations remain unclear. This study investigates the association between market competitive strategy and audit firm choice among Chinese listed companies, with government ownership as a moderator. A logistic multivariate regression analysis was conducted by using 9,590 year-observations of Chinese-listed companies during the period of 2018–2021. Results show that companies with aggressive offensive strategies tend to appoint larger audit firms, whereas companies with aggressive defensive strategies favour smaller audit firms. No evidence shows that government-owned companies influence audit firm choice, but government ownership moderates the relationship between market competitive strategies and audit firm choice. The findings are useful for listed companies to select the best audit quality that fits with the adopted market competitive strategy and provide references for regulators to assess and promote the healthy development of China’s audit market. This work is a pioneer in providing associations among market competitive strategy, government ownership and audit firm choice
format Article
author Zheng Wei,
Mohd Mohid Rahmat,
spellingShingle Zheng Wei,
Mohd Mohid Rahmat,
Market competitive strategy, government ownership and audit firm choice: evidence from China
author_facet Zheng Wei,
Mohd Mohid Rahmat,
author_sort Zheng Wei,
title Market competitive strategy, government ownership and audit firm choice: evidence from China
title_short Market competitive strategy, government ownership and audit firm choice: evidence from China
title_full Market competitive strategy, government ownership and audit firm choice: evidence from China
title_fullStr Market competitive strategy, government ownership and audit firm choice: evidence from China
title_full_unstemmed Market competitive strategy, government ownership and audit firm choice: evidence from China
title_sort market competitive strategy, government ownership and audit firm choice: evidence from china
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2023
url http://journalarticle.ukm.my/22807/1/pengurusan_68_11.pdf
http://journalarticle.ukm.my/22807/
https://www.ukm.my/jurnalpengurusan/volume-main/jurnal-pengurusan/
_version_ 1787134667915264000
score 13.211869

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