We examine whether Big Four auditors influence the financial reporting quality of Chinese firms audited by non-Big Four auditors through learning by interlocked audit committee (AC) members. We document that non-Big Four clients exhibit significantly higher reporting quality when their AC members concurrently serve on the ACs of Big Four audited firms. This spillover effect is more pronounced when AC members have stronger incentives to learn or when alternative learning channels are limited. The observed AC learning appears to reflect exposure to recent developments in accounting and auditing standards, as well as enhanced understanding of business and risk environments. In contrast, we find no comparable effect associated with interlocks involving China's top domestic audit firms. These findings highlight the positive externality of Big Four auditors in enhancing financial reporting quality in China, facilitated by on-the-job learning among AC members who serve clients across both Big Four and non-Big Four firms.

This paper investigates whether and how independent director-affiliated corporate donations affect stock price crash risk in China. We find a significant positive relationship between affiliated donations and future crash risk. The relationship is more significant for firms with weak internal governance and limited external monitoring, when affiliated directors serve on the audit committee, and in non-state-owned enterprises. Overall, our findings suggest that the social ties built through affiliated donations undermine rather than enhance director monitoring, and that agency theory has more explanatory power than resource dependence theory for understanding the impact of affiliated donations on stock price crash risk.

This study investigates the relationship between directors’ foreign experience and corporate environmental disclosure in Chinese listed firms from 2009 to 2017. The research shows that directors with foreign experience have a positive and significant impact on corporate environmental disclosure. This effect is more pronounced in nonstate-owned enterprises, where directors have greater influence over managerial decisions. Additionally, the study suggests that in industries with high energy consumption, high pollution, or overcapacity, the positive effect can be further enhanced by having at least three directors with foreign experience or foreign experience members in the audit committee. The impact of experiential diversity on environmental disclosure is greater than that of board gender and independence diversity. The findings suggest that policymakers and firms prioritize the recruitment of directors with diverse experiences to improve their environmental disclosure practices.