会议论文摘要：
In China, audit firms can be organized as either general partnerships with unlimited liability or limited liability corporations (LLCs) and the partnerships own more than 15 percent of the audit market of listed companies. We take advantage of this unique setting and use a sample of Chinese listed companies during 2000-2004 to investigate the relationship between audit firm organizational form and audit quality. Using single equation models, we find that LLC form of audit firms is associated with larger magnitude of discretionary accruals and a lower probability of issuing a modified audit opinion. However, these results do not hold when we apply two-stage models that consider companies’ self-selection of a specific organizational form of audit firms. Overall, our findings do not suggest that audit quality is lower for the limited liability form of audit firms.
