| Summary: | 碩士 === 國立彰化師範大學 === 會計學系 === 105 === Due to complicated structure of sharing-holdings in affiliated business groups (pyramid structure、cross-shareholdings), the problem of information asymmetry is more serious than general enterprise. In order to meet market expectations and maintain the stock price, the managers are likely to manipulate earnings, resulting in the credibility of the company’s financial statements greatly reduced. When the company’s financial reports can not reflect the correct earnings information, the possibility of financial restatement is relatively higher.The purpose of this study is to examine whether the CPA could reduce financial restatements in affiliated business groups when the CPA has more auditing experiences in several industries.
In this study, I choose the listed companies which contains 7953 observations during the period from 1998 to 2012 as sample. The empirical results show that if the CPA has more auditing experiences in several industries, it could reduce financial restatements in affiliated business groups. In addition, if the CPA from Big 4 CPA firms has more auditing experiences in several industries, the effect of reducing financial restatements is not obvious. Finally,
after using the other method to measure CPA’s audit abilities and exclude the annual samples of Procomp scandal and China Rebar scandal, the results remain the same.
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