Advances in Economics, Management and Political Sciences

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Proceedings of the 2023 International Conference on Management Research and Economic Development

Series Vol. 20 , 13 September 2023

Open Access | Article

The Impact of US-CN Audit Agreement on US-listed Chinese Companies and Its US Peers

Yinuo Zhang * 1 , Yang Chen 2 , Zirui Wang 3 , Jiayi Gong 4
1 Washington University in St. Louis
2 Xi'an Jiaotong-Liverpool University
3 University of Nottingham Ningbo
4 The Chinese University of Hong Kong

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 20, 47-56
Published 13 September 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Yinuo Zhang, Yang Chen, Zirui Wang, Jiayi Gong. The Impact of US-CN Audit Agreement on US-listed Chinese Companies and Its US Peers. AEMPS (2023) Vol. 20: 47-56. DOI: 10.54254/2754-1169/20/20230171.

Abstract

This paper examines the US-CN Audit Agreement’s influences on investors’ reactions towards US-listed Chinese companies and the potential spillover effect on US domestic listed companies with the same auditors that Chinese companies have. The sample consists of 282 Chinese US-listed companies and 3986 U.S. companies with the same auditors as those Chinese companies. We then compare the average stock return of U.S.-listed Chinese companies and the U.S. companies based on the sample period for the stock return data begins from July 27, 2022, to Aug 29, 2022. By using T-test separately, we found that U.S. companies have higher average stock returns in the previous 21-days period, and in the 3-day announcement window, the difference in stock returns between U.S.-listed Chinese companies and U.S. companies is not material. Therefore, we document that although investors become so alarmed by the publication of the US-China Audit Agreement that stock returns suffer. As a result, the success of US-China audit cooperation will increase investor confidence and help Chinese companies' stock returns and mitigate the negative effects.

Keywords

US-CN audit agreement, stock return, spillover effect, binding hypothesis

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 2023 International Conference on Management Research and Economic Development
ISBN (Print)
978-1-915371-83-6
ISBN (Online)
978-1-915371-84-3
Published Date
13 September 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/20/20230171
Copyright
13 September 2023
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated