Group Client Importance and Financial Restatements

• Main Author: 陳昱儒
• Other Authors: 張文瀞
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/39594765075402326360

碩士 === 國立彰化師範大學 === 會計學系 === 97 === The impact of client importance on audit quality has been inconsistent in previous researches. The inconsistent results are due to the trade-off among economic dependence, reputation protection, and audit cost reflection. Besides, the famous business group fraud, Rebar, has raised the concern of the role of auditors in business groups. Thus, different from previous researches, this research use business groups as the basis of calculation of client importance. The purpose of this research is to investigate the relation between client importance of business groups and financial restatements. The research uses 88 restatement observations and 88 non-restatement observations from 1996 to 2007 as the research samples. The results of this research are stated as the following. 1. The relation between group client importance and the possibility of financial restatements is significantly positive at both firm level and individual level. 2. The relation between group client importance and the severity of financial restatements is significantly positive at both firm level and individual level. 3. Compared to non-big 4 clients, the impact of group client importance on financial restatements is smaller for big 4 clients. Overall, group client importance will definitely influence financial restatements.