Open Journal of Business and Management

Volume 4, Issue 1 (January 2016)

ISSN Print: 2329-3284   ISSN Online: 2329-3292

Google-based Impact Factor: 0.91  Citations  

Research on Industry Leaders’ External Auditing Demand in China—Based on the Signal Transfer Theory

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ABSTRACT

This paper validates the demand for audit’s signal transfer theory by China’s A-share listed company data. As having a significant influence on the region and the industries where they locate in, industry leaders will catch more attention. In this case, compared to other companies, industry leaders have stronger demands for high-quality audit services, because it can transmit a signal to the market that they are under a good company supervision. However, high growth industry leaders don’t have a stronger demand for high quality audit services than other ones as we refer in the hypothesis. The reason is that even industry leaders do not have external financing needed, they will still choose high-quality audit services, as it can transfer a good signal to the outside world.

Cite this paper

Wen, Z.Q. (2016) Research on Industry Leaders’ External Auditing Demand in China. Open Journal of Business and Management, 4, 114-119. doi: 10.4236/ojbm.2016.41013.

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