How Have Auditors Managed Their Chinese ADR Engagements?

The controversy over Chinese reverse mergers, which are directly listed on U.S. stock exchanges, has led to concerns about the audit quality of all U.S. listed Chinese companies. Because a sizeable number of foreign firms cross list their shares as American Depositary Receipts (ADRs) issued by U.S. depositary banks (as opposed to directly listed), we study how auditors have managed Chinese ADRs. Our motivation for examining Chinese ADRs is based on the findings that cross-listing via the ADR process is beneficial for U.S. shareholders, generally results in higher valuations, and is less likely to be associated with misreporting. Read more

Aloke Ghosh and Elizabeth Peltier, 2015, Working paper, Baruch College

 

Accounting losses, CEO Turnover, and Turnover Risk Premium
CEOs are typically fired when boards deems performance as being poor or unacceptable, yet there is no acceptable definition of poor performance. Is there a ‘break-even point’ below which performance is deemed unacceptable? Read more

Aloke Ghosh and Jun Wang, 2014, Working paper, Baruch College, New York, NY.