If you change just one page of a national accounting exam, you can actually trick an entire country's CEOs into playing it safe with their money.
April 6, 2026
Original Paper
Educating the Gatekeepers: The Real Effects of Auditor Risk Training on Client Firm Policies
SSRN · 6521440
AI-generated illustration
The Takeaway
When China changed its CPA exam to focus more on risk management, the companies audited by those new accountants immediately began making more cautious business decisions. This reveals that the education of 'gatekeepers' like auditors has a massive, invisible ripple effect on how the world's largest businesses operate.
From the abstract
This study examines whether and how auditor risk education influences corporate risk-taking. Leveraging the 2009 reform of China’s CPA examination—which introduced a mandatory “Corporate Strategy and Risk Management” subject—as a quasi-natural experiment, we identify auditors who qualified after the reform (“new-regulation auditors”). Using a hand-matched sample of individual auditors and their client listed firms from 2010 to 2020, we find that companies audited by new-regulation auditors exhib