Separate Auditing or Not? The Impact of Relational Concern on Board of Director’s Choice of Auditor in Chinese Public Listed Companies?
Jing Han, Jidong Zhang

Abstract
This paper was aiming to address an in time research question: why Chinese public listed companies showed differences in terms of the number of auditors they used to audit internal control over financial reporting and financial statement under new regulations on security exchange. Integrating theoretical perspectives from both intra and inter organization studies, the author explained the influence of relational concern brought by the directors who held multiple functions on board’s choice of auditor. The author pointed out that the multifunctional directors were prevalent in Chinese firms and the presence and proportion of such directors in the board would make the concern about the internal and external relationship salient during the choice of auditor. A series of propositions regarding to the influence of board-top management team relationship, the relation with other companies’ boards, and the enterprise-government relationship brought by the multiple function directors have been proposed. This conceptual paper enriches our understanding about the influence of intrapersonal diversity on team decision making process, and has implication for Chinese regulators on how to boost separate auditing.

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