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Eyes Are on Fed's Dot Plot; Inflation Risk Rises as Oil Prices Surge By James Christie Good day. With the Federal Reserve having signaled it would hold interest rates steady today and make no...
SYNOPSIS: In this study, we propose a reciprocal rent-seeking game between politicians and individual auditors with political connections and examine how these auditors’ political connections influence their audit quality. Using hand-collected data from China between 2008 and 2013, we find that politically connected auditors have a significantly lower tendency to issue modified audit opinions (MAOs). We also find that politicians’ career prospects are significantly adversely influenced by MAOs being issued in their jurisdictions, while connected auditors charge higher audit fees, acquire l...