Faculty of Business Administration

From Auditors to Directors/Executives: Goodies from Acquiescence

Feida (Frank) Zhang

UB Business School，University of Queensland

Abstract

Individual auditors are often appointed by listed companies as board directors or top executives. Using an original dataset that links individual auditors to their appointment with listed companies, we find that acquiescent auditors are more likely to be hired by listed companies as directors/executives than non-acquiescent auditors, supporting our argument that managers who were ingratiated by acquiescent auditors might feel indebted towards these auditors and will then seek opportunities to return favour by either offering positions from their own companies or using their networking to help these auditors secure director/executive positions in other listed companies. Our further analysis shows that the positive association between auditor acquiescence and director/executive appointment is more pronounced when client CEOs are more indebted to auditors or when client CEOs are more capable of helping auditors secure these lucrative positions in listed companies. Our findings are robust to different measurements and specifications.

Date: Jul 11, 2019 (Thursday)

Time: 15:00~16:30

Venue: E22-2007

Biography

Prof. Feida Zhang is an associate professor of accounting in Business School of University of Queensland, Australia. He holds CPA certifications both in Australia and China. He received his Ph.D. in Accounting from Hong Kong Baptist University. He is active in accounting research and his current research areas and interests cover accounting conservatism and earnings quality, corporate disclosure and corporate transparency, corporate governance and cost of capital, and accounting research assessment. He has published accounting research papers in top journals such as Journal of Business Ethics, Journal of Corporate Finance, Accounting and Finance, European Accounting Review, Journal of International Accounting Research, etc.