Does Auditors' Reputation 'Discourage' Related-Party Transactions? The French Case

Abstract : We use a unique data set from a sample of 85 French firms over the period 2002-2008 in order to answer the following questions: Is there any relation between the use of auditors with a brand-name reputation for providing high-quality audit reports and the number of related party transactions (RPTs) reported to outside shareholders? And, how does a more transparent environment for the reporting of related party transactions affect this relationship, if at all? We find that firms audited by Big 4 auditors report fewer related party transactions. The period under study includes the change in accounting standards in Europe that occurred in 2005 with the adoption of IFRS standards, which resulted in a more transparent reporting environment for RPTs. We find that the negative relationship between auditor reputation and the number of reported of RPTs is "weaker" in a more transparent reporting environment. We argue that these results are related to the accounting uncertainty surrounding the reporting of related party transactions that particularly affects the behavior of Big 4 auditors.
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Article dans une revue
Auditing: A Journal of Practice and Theory, American Accounting Association, 2015, n.p. 〈10.2308/ajpt-51036〉
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https://hal-neoma-bs.archives-ouvertes.fr/hal-01163214
Contributeur : Sandrine Palmer <>
Soumis le : vendredi 12 juin 2015 - 12:45:35
Dernière modification le : mercredi 30 août 2017 - 01:13:45

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Moez Bennouri, Mehdi Nekhili, Philippe Touron. Does Auditors' Reputation 'Discourage' Related-Party Transactions? The French Case. Auditing: A Journal of Practice and Theory, American Accounting Association, 2015, n.p. 〈10.2308/ajpt-51036〉. 〈hal-01163214〉

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