The Relationship between Supply Chain CPAs, CSR and Discretionary Accruals

Abstract

<p>This research explores the corporate social responsibility (CSR) performance of listed companies in Taiwan by looking at how companies meet their CSR obligations and by exploring how employing supply chain certified public accountants (CSRSCPAs) affects the quality of their earnings. However, despite the benefits stemming from enhanced information corroboration and expertise spillover, CSRSCPAs face the challenge of potential information collusion. It finds that the CSRSCPA has a negative effect on discretionary accruals. Hence, this study looks at supply chain CPAs in the context of the company’s CSR performance to find out the impact of the company’s financial statements. In addition, the results of this study indicate that both a positive earnings quality and a positive public response ensue when the Big 4 audit firms audit CSR companies. Our results show that market participants highly value Big 4 supply chain CPAs with industry experience and that these impressions extend to their evaluation of clients. The inclusion of different supply chain streams reveal that upstream CSRSCPA are more likely than middlestream and downstream CSRSCPA to receive favorable reactions from market participants. This is an indication that market participants are impressed by the specific expertise and knowledge of these professionals.</p>