Corporate Governance, Business Complementarity and Audit Quality

• Main Authors: Chinghow Wang, 王敬皓
• Other Authors: Ente Hsu
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/60696730591086763231

碩士 === 東海大學 === 會計學系 === 95 === Corporate governance is a hot issue in the world. Business complementarity is a new business model in sustaining competitive advantage. Designing mechanisms for corporate governance will increase CPAs’ audit quality, but enhancing business complementarity will induce an adverse effect. This paper studies the effects of corporate governance, focusing ownership structure and characteristics of board, on the association between business complementarity and audit quality. The results can be used to examing the effects of corporate governance in Taiwan. Business complementarity is measured by current liabilities over total asset and sales over total sales. Audit quality is measured by discretionary accruals. We find that increasing members in board will mitigate business complementarity to harm CPAs’ audit quality. However, if controlling shareholders have large control rights and control and cash flow rights of controlling shareholders are divergent, business complementarity will exacerbate to harm audit quality. The results indicate that the corporate governance mechanisms had obvious effects in Taiwan, but the mechanism of outside director still need to be improved.