We propose that relationship-specific investment induces accounting conservatism and find that at both industry and firm levels a firm's accounting conservatism is positively associated with relationship-specific investment of its customers/suppliers. Further, this association is weaker when...

This study investigates the valuation effect of modified audit opinions (MAOs) on the emerging Chinese stock market. Here, the term MAO refers to both qualified opinions and unqualified opinions with explanatory note(s). The latter can be considered an alternative form of qualified opinion in...

This study provides an empirical examination of whether domestic investors in the Chinese stock market perceive accounting information based on Chinese GAAP to be useful in stock valuation. The study is motivated by the market-based value relevance literature in the U.S. and by the recent...

This study, using data from the Chinese stock market, investigates the relationship between earnings management induced by profitability regulation and modified audit opinions (MAOs). We review recent developments in the accounting profession and in independent auditing to foster an...

This paper reports the results of an empirical examination of the difference between earnings based on Chinese GAAP and those based on International Accounting Standards (IAS). Specifically, the study determines how current Chinese accounting standards are different from the IAS, whether these...

Using novel data on independent directors' opinions in China, we investigate the stock and labor market effects prompted by independent directors publicly saying "no" to major board decisions. We find that the market reacts negatively to modified director opinions, but positively to firms...