Institute of Business and Management
|關鍵字:||會計師選任;補助及捐贈收入;非營利組織;信號傳遞;CPA Selection;Private Donation;Government Financial Support;Private Universities;Information Signaling|
CPA selection is part of organization's overall accounting strategy. This paper analyzes the relationship between CPA selection of nonprofit organization and the donation or subsidy companies received and use this to explore why many private universities select the same small accounting firm. The value of audit is in improving the quality of financial information. To reduce the information asymmetry problem, corporations always select good reputation accountants to audit their financial reports while other organizations may select cheaper accountants. This study examines whether private universities can improve their fundraising to maximize their self-interests by selecting a good reputation auditor. We apply signaling games to analyze the relationship between the CPA selection and amount of donation or government financial support for private universities. This study collects the schools' data from academic year 2004 to 2008. The empirical results show that schools receive more private donation or government financial support small accounting firm when financial reports in prior year were audited by Big-4 CPA firms. We also partition the small accounting firm to two new separate variables: private donation and government financial support. The result is consistent with the SA variable. However, schools selecting the specific small accounting firm mere meet the regulations; these schools receive fewer private donations or government financial supports. This indicates that private universities try to send an important signal to outsiders through CPA selection. This signal affects private donations or government financial supports for private universities.
Journal of Management and Systems