Back Issues 11-20
THE ROLE OF AUDIT QUALITY IN FINANCIAL DISTRESS: EVIDENCE FROM CHINA
THE ROLE OF AUDIT QUALITY IN FINANCIAL DISTRESS: EVIDENCE FROM CHINA
Shu-Ling Chang
Department of International Business,
Southern Taiwan University
of Science and Technology, Taiwan, R.O.C.
Long-Jainn Hwang*
Department of Marketing and Distribution Management,
WuFeng University, Taiwan, R.O.C.
*(corresponding author) This email address is being protected from spambots. You need JavaScript enabled to view it.
Abstract
For stakeholders, to predict the survival probability of a company in a financial crisis is very important. The objective if this article is to investigate whether the firm’s financial distress is predictable using artificial intelligence techniques research methods. We analyze whether audit quality is the key factor to affect the occurrence of company’s financial distress in China. Using binary choice model and life test method, the evidence indicates that audit quality of the firm is negatively correlated with the probability of firm’s financial distress. The finding support that firm with higher audit quality would be more likely to reduce the probability of financial distress.
Keywords: audit quality, financial distress prediction, binary choice model
 1044 final.pdf | [ ] | 2636 kB |