The effect of shared auditors in the supply chain on cost stickiness
Do supply chain audits have real effects? We focus on the effect of shared auditors in the supply chain on corporate cost stickiness. When a supplier shares auditors with its customers, the shared auditors provide informational advantages for suppliers’ managers, thus revising their optimistic or pe...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2019-12-01
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| Series: | China Journal of Accounting Research |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S1755309118301084 |
| _version_ | 1828860341737488384 |
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| author | Chun Cai Qianwen Zheng Lei Zhu |
| author_facet | Chun Cai Qianwen Zheng Lei Zhu |
| author_sort | Chun Cai |
| collection | DOAJ |
| description | Do supply chain audits have real effects? We focus on the effect of shared auditors in the supply chain on corporate cost stickiness. When a supplier shares auditors with its customers, the shared auditors provide informational advantages for suppliers’ managers, thus revising their optimistic or pessimistic expectations and influencing suppliers’ cost stickiness. Using a sample of Chinese A-share listed companies from 2009 to 2017, we explore the relationship between shared auditors and suppliers’ cost stickiness conditional on management expectations. The results show that shared auditors in the supply chain reduce suppliers’ cost stickiness significantly when suppliers’ managers hold optimistic expectations, and increase suppliers’ cost stickiness in cases of pessimistic expectations. Furthermore, the greater the number of shared auditors, the stronger the effect. Such effects are more pronounced when supplier firms share auditors with important customers, have higher demand uncertainty, and use big 10 auditors. Keywords: Shared auditors, Cost stickiness, Management expectations, Information environment, Supply chain |
| first_indexed | 2024-12-13T02:36:59Z |
| format | Article |
| id | doaj.art-6d3603361df24736a854d03e8810bd7c |
| institution | Directory Open Access Journal |
| issn | 1755-3091 |
| language | English |
| last_indexed | 2024-12-13T02:36:59Z |
| publishDate | 2019-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | China Journal of Accounting Research |
| spelling | doaj.art-6d3603361df24736a854d03e8810bd7c2022-12-22T00:02:23ZengElsevierChina Journal of Accounting Research1755-30912019-12-01124337355The effect of shared auditors in the supply chain on cost stickinessChun Cai0Qianwen Zheng1Lei Zhu2School of Accounting, Southwestern University of Finance and Economics, The Center for China’s Governmental Auditing Research, ChinaCorresponding author at: School of Accounting, Southwestern University of Finance and Economics, Tongbo Building D410, 555, Liutai Avenue, Wenjiang District, Chengdu, Sichuan 611130, China.; School of Accounting, Southwestern University of Finance and Economics, The Center for China’s Governmental Auditing Research, ChinaSchool of Accounting, Southwestern University of Finance and Economics, The Center for China’s Governmental Auditing Research, ChinaDo supply chain audits have real effects? We focus on the effect of shared auditors in the supply chain on corporate cost stickiness. When a supplier shares auditors with its customers, the shared auditors provide informational advantages for suppliers’ managers, thus revising their optimistic or pessimistic expectations and influencing suppliers’ cost stickiness. Using a sample of Chinese A-share listed companies from 2009 to 2017, we explore the relationship between shared auditors and suppliers’ cost stickiness conditional on management expectations. The results show that shared auditors in the supply chain reduce suppliers’ cost stickiness significantly when suppliers’ managers hold optimistic expectations, and increase suppliers’ cost stickiness in cases of pessimistic expectations. Furthermore, the greater the number of shared auditors, the stronger the effect. Such effects are more pronounced when supplier firms share auditors with important customers, have higher demand uncertainty, and use big 10 auditors. Keywords: Shared auditors, Cost stickiness, Management expectations, Information environment, Supply chainhttp://www.sciencedirect.com/science/article/pii/S1755309118301084 |
| spellingShingle | Chun Cai Qianwen Zheng Lei Zhu The effect of shared auditors in the supply chain on cost stickiness China Journal of Accounting Research |
| title | The effect of shared auditors in the supply chain on cost stickiness |
| title_full | The effect of shared auditors in the supply chain on cost stickiness |
| title_fullStr | The effect of shared auditors in the supply chain on cost stickiness |
| title_full_unstemmed | The effect of shared auditors in the supply chain on cost stickiness |
| title_short | The effect of shared auditors in the supply chain on cost stickiness |
| title_sort | effect of shared auditors in the supply chain on cost stickiness |
| url | http://www.sciencedirect.com/science/article/pii/S1755309118301084 |
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