China Accounting and Finance Review

, 15:1

First online:

Open Access This content is freely available online to anyone, anywhere at any time.


  • Deming YangAffiliated withSchool of Accounting, Yunan University of Finance and EconomicsGuanghua Management School, Peking University
  • , Min LiuAffiliated withSchool of Accounting, Yunan University of Finance and EconomicsJian City Branch, the People’s Bank of China

Does the Media as a Watchdog Affect Auditors’ Decisions?


Our paper investigates the information intermediary role of the media from the perspective of auditors. Using negative media coverage as the proxy variable for the watchdog role of the media, our investigation finds that the probability of issuing a modified audit opinion increases when the company has been the subject of negative media coverage and that negative media coverage significantly affects the change of certified public accountant (CPA) firm but does not significantly affect audit fees. In sum, the media as a watchdog affects auditors’ decisions to some extent, and our findings suggest that the media serves as an important information intermediary from the perspective of auditors. We suggest that the hypotheses of risk aversion and saving audit costs explain these findings very well.


Auditors Media Information Intermediary Auditors’ Decisions