A continuous relation between audit firm size and audit opinions : evidence from China

Chuntao LI, Frank M. SONG, Man Lai, Sonia WONG

Research output: Journal PublicationsJournal Article (refereed)peer-review


This study documents a continuous relation between audit firm size and the issuing of modified opinions in China using a panel data set of audit firms and listed firms from 2001 to 2003. The relation is robust after controlling for a set of confounding factors and dealing with endogeneity issues. It is also robust when we exclude audit firms involving foreign partners or private client firms from our sample. Our results indicate that the audit firm size effect suggested in other studies is applicable to audit markets that have not yet been dominated by a few very large audit firms as well as audit markets where client firms are partially state-owned entities.
Original languageEnglish
Pages (from-to)111-127
Number of pages17
JournalInternational Journal of Auditing
Issue number2
Publication statusPublished - 1 Jul 2008


  • Audit firm size
  • China's audit market
  • audit opinion
  • audit quality

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