Board co-option and audit quality: Evidence from US
研究了美国上市公司中董事会成员与CEO共选对审计质量的影响，发现共选程度越高，审计质量越低，而企业社会责任委员会和强治理能缓解这一负面效应。
This study investigates the impact of board co-option on audit quality, a vital dimension of corporate governance that has received limited attention. Using a dataset of 9605 firm-year observations from U.S. listed firms, we examine the extent to which co-opted directors aligned with CEOs compromise audit quality, measured through BIG4 auditor selection and audit fees. Results show that board co-option significantly reduces audit quality, a finding robust to alternative co-option measures, propensity score matching, and IV-Probit models. Notably, the presence of a CSR committee and stronger governance scores mitigate these negative effects – highlighting their significant role. These findings accentuate the need for regulatory reforms to strengthen board independence and institutionalize CSR committees, enhancing governance practices and accountability. • The first study examines the impact of board co-option on audit quality. • We use a probit regression model by following the dichotomous nature of our dependent variable. • Firms with more board co-option are more prone to compromise the quality audit. • This association is weakening in the presence of strong governance and CSR committees. • If a firm has high analyst coverage, it will ensure the quality of internal as well as external governance.