Electronic Theses and Dissertations




Shipeng Han



Date of Award


Document Type


Degree Name

Doctor of Philosophy


Business Administration



Committee Chair

Zabihollah Rezaee

Committee Member

Sandra Mortal

Committee Member

Albert Okunade

Committee Member

Joseph Zhang


The purpose of this dissertation is to investigate whether and how the current issue in business (Corporate Social Responsibility) and short sellers (Regulation SHO) have impact on auditors conservatism and auditor changes. In paper 1, I examine whether CSR disclosure and sustainability assurance have impact on auditor conservatism. The results show that the propensity to issue going-concern opinion to the companies that do not disclose CSR reports is significantly higher than those disclose. The results imply that CSR disclosure signals lower business and litigation risk. In addition, companies disclosing CSR reports have higher discretionary accruals, indicating that auditors are more conservative to non-disclosing companies by requiring more conservative accounting choice. This paper contributes to the literature by providing additional evidence that CSR is an important factor for auditors to evaluate their clients’ litigation and business risk. In paper 2, I examine whether Corporate Social Responsibility (CSR) performance has impact on auditor changes. The findings suggest that auditor changes happen when clients perform poorly in CSR. I further find that auditors take CSR performance into consideration in making decision and are more likely to resign from clients who have inferior CSR performance. Likewise, inferior CSR companies are also more likely to dismiss their predecessor auditors. Finally, I find that inferior CSR companies are more likely to have disagreement with their predecessor auditors on accounting choices. The results imply that CSR performance has been becoming an important factor for an auditor or client to terminate or retain an engagement. In paper 3, I investigate whether short selling has a causal impact on auditor changes. By employing an exogenous regulation shock, I find that managers are less likely to change their auditors when short selling becomes easier. In particular, companies are less likely to change their auditors associated with “bad news”. I also find that the disciplinary effect of short selling is stronger for companies with more severe agency problems and higher degree of information asymmetry. The findings imply that short sellers prevent management from opportunistic behavior by forcing management to act on the behalf of the investors and retaining their incumbent auditors.


Data is provided by the student.

Library Comment

dissertation or thesis originally submitted to the local University of Memphis Electronic Theses & dissertation (ETD) Repository.