Zhongtianqin, the largest Chinese auditor in 2000, collapsed in 2001 owing to its audit failure. This study examines how the market reacted to the audit scandal in the Chinese institutional setting. Chinese investors are entitled to recover their investment losses from auditors owing to audit...

Prior research documents wide variation in the precision of accounting standards (rules-based standards (RBS) versus principles-based standards (PBS)). We examine whether financial reporting quality evident in restatements is associated with accounting standard precision and whether the role...