Secrecy Culture and Audit Opinion: Some International Evidence

We examine whether and how auditors respond to audit risks arising from secrecy culture when making audit opinion decisions. Using a sample of international Big N auditors from 33 countries, we find strong and robust evidence that auditors are more likely to issue modified audit opinions to clients...

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Bibliographic Details
Published inJournal of international financial management & accounting Vol. 28; no. 3; pp. 274 - 307
Main Authors Chen, Theodore T. Y., Zhang, Feida (Frank), Zhou, Gaoguang (Stephen)
Format Journal Article
LanguageEnglish
Published Oxford Blackwell Publishing Ltd 01.10.2017
Subjects
Audit risk
Auditors opinions
Audits
Classified information
Corporate culture
Culture
Secrecy
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Summary:We examine whether and how auditors respond to audit risks arising from secrecy culture when making audit opinion decisions. Using a sample of international Big N auditors from 33 countries, we find strong and robust evidence that auditors are more likely to issue modified audit opinions to clients domiciled in countries with a strong secrecy culture. In addition, we find that the association between secrecy culture and auditors' propensity to issue modified audit opinions is less pronounced in countries with strong investor protection than that in countries with weak investor protection.
ISSN:0954-1314
1467-646X
DOI:10.1111/jifm.12057