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Tao Li Zuyun Xue Xiamen University March 2005

Board Composition and the Dismissal of Auditor —— Empirical Evidence from China ’ s Securities Market. Tao Li Zuyun Xue Xiamen University March 2005. Abstract. Research subject Extant research Hypotheses development Research design

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Tao Li Zuyun Xue Xiamen University March 2005

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  1. Board Composition and the Dismissalof Auditor—— Empirical Evidence from China’s Securities Market Tao Li Zuyun Xue Xiamen University March 2005

  2. Abstract • Research subject • Extant research • Hypotheses development • Research design • Research result • Conclusion

  3. Research subject • Research problem • Under the specific environment in China, how does board composition of listed company influence its decision to dismiss CPA Firms?

  4. Motivation • Regulations in other countries • IOSCO • Sarbanes-Oxley Act • Situation in our country

  5. Extant research • Research in other countries • Francis & Wilson ,1988 • Carcello & Neal ,2003 • Lee、Mande、Ortman ,2004 • Research in our country • Shuang Li、Xi Wu,2000 • Jiangxin Geng、He Yang,2001 • Dongping Li et al. ,2001 • Zhengfei Lu、Pan Tong,2003

  6. Hypotheses development • Institutional Background • Hypotheses • H1:The more board members from within,the more possibility the dismissal of aduitor.

  7. H2:Alteration of president is related to the dismissal of auditor. • H3:Establishment of audit committee decreases possibility of the dismissal of auditor.

  8. Research design • Sample selection • Listed companies which dismissed CPA firms in 2002 and 2003. • Definition of the variables • Explained variables • Inside • Change • Audit

  9. Control variables • First • Opinion • Alien • ST • Size

  10. Model 1

  11. Research result

  12. Model 2

  13. Conclusion • During the research period, under the situation that the president of a listed company hold a post in the owned by the primary share holder company, the more board members from within, the more possibility dismissal for CPA Firms. • Listed companies that change its president are more likely to dismiss CPA Firms.

  14. Listed companies without dismissal for CPA Firms are more likely to establish audit committee in directorate. • Listed companies with Special treatment or MAO issued are more likely to dismiss CPA Firms.

  15. Thank You!

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