IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01163214.html
   My bibliography  Save this paper

Does Auditors' Reputation 'Discourage' Related-Party Transactions? The French Case

Author

Listed:
  • Moez Bennouri

    (NEOMA - Neoma Business School)

  • Mehdi Nekhili

    (URCA - Université de Reims Champagne-Ardenne)

  • Philippe Touron

    (UP1 - Université Paris 1 Panthéon-Sorbonne)

Abstract

We use a unique data set from a sample of 85 French firms over the period 2002-2008 in order to answer the following questions: Is there any relation between the use of auditors with a brand-name reputation for providing high-quality audit reports and the number of related party transactions (RPTs) reported to outside shareholders? And, how does a more transparent environment for the reporting of related party transactions affect this relationship, if at all? We find that firms audited by Big 4 auditors report fewer related party transactions. The period under study includes the change in accounting standards in Europe that occurred in 2005 with the adoption of IFRS standards, which resulted in a more transparent reporting environment for RPTs. We find that the negative relationship between auditor reputation and the number of reported of RPTs is "weaker" in a more transparent reporting environment. We argue that these results are related to the accounting uncertainty surrounding the reporting of related party transactions that particularly affects the behavior of Big 4 auditors.

Suggested Citation

  • Moez Bennouri & Mehdi Nekhili & Philippe Touron, 2015. "Does Auditors' Reputation 'Discourage' Related-Party Transactions? The French Case," Post-Print hal-01163214, HAL.
    • Handle: RePEc:hal:journl:hal-01163214
    DOI: 10.2308/ajpt-51036
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Ching-Lung & Chen, Chung-Yu & Weng, Pei-Yu, 2020. "Do related party transactions always deteriorate earnings informativeness?," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    2. Hyunjung Choi & Jungeun Cho, 2021. "Related-Party Transactions, Chaebol Affiliations, and the Value of Cash Holdings," Sustainability, MDPI, vol. 13(2), pages 1-13, January.
    3. Bhandari, Avishek & Kohlbeck, Mark & Mayhew, Brian, 2022. "Association of related party transactions with sensitivity of investments and external financing," Journal of Corporate Finance, Elsevier, vol. 72(C).
    4. Nicole V. S. Ratzinger-Sakel & Sophie Audousset-Coulier & Jaana Kettunen & Cédric Lesage, 2013. "Joint Audit: Issues and Challenges for Researchers and Policy-Makers," Accounting in Europe, Taylor & Francis Journals, vol. 10(2), pages 175-199, November.
    5. Andrikopoulos, Andreas & Merika, Anna & Merikas, Andreas & Sigalas, Christos, 2021. "Related party transactions and principal-principal conflicts in public companies: Evidence from the maritime shipping industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    6. Bi, XiaoGang & Tang, Judy & Tharyan, Rajesh, 2020. "Switching due diligence auditor in Chinese mergers and acquisitions," Research in International Business and Finance, Elsevier, vol. 54(C).
    7. Mai, Nhat Chi, 2020. "Related Party Transactions, State Ownership, the Cost of Corporate Debt, and Corporate Tax Avoidance: Evidence from Vietnam," OSF Preprints y5qj3, Center for Open Science.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-01163214. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.