Does auditor reputation affect related party transactions? evidence from india

Abstract

This study examines the effect of auditor reputation on related party transactions (RPTs) in Indian listed companies. Using 7482 firm-year observations from 2011-2020, I find that auditor reputation is associated with better disclosure of RPTs in Indian companies, i.e., firms audited by reputed auditors (BIG4) report more RPTs. Further, this study provides evidence that the disclosure of RPTs improved after implementing the Companies Act in 2013, possibly due to a more transparent environment for the identification and disclosure of RPTs.