Strategic deviance and auditor selection

Using data of Chinese A-share non-financial listed companies spanning years 2003–2018, we examine whether a firm’s business strategy that deviates from industry conventions influences corporate governance mechanisms, particularly the probability choosing high-quality external auditors. We document significantly positive correlation between strategic deviance and auditor engagement. The exacerbation agency conflict is an important driver for firms with to hire Moreover, find evidence hiring Big 4 auditors can curb earnings management capital occupation major shareholders in deviant strategy. conclude strategically due conflicts.