IMPACT OF EXTERNAL AUDITORS ON CORPORATE GOVERNANCE OF THE MANUFACTURING INDUSTRY IN CHINA

Abstract

External auditors play an important role in cross-checking different companies' financial records. In return, external auditors have an impact on overall corporate governance. This research was conducted to determine external auditors' impact on Manufacturing Industry's corporate governance in China. The study uses quantitative research methods through a questionnaire as data collection. The analysis shows external auditors' incentives. Characteristics, competence, business environment, reports and independence from the firm have an impact on corporate governance. The analysis using SPSS shows a significant impact of the five independence variable on corporate governance. The study concludes that external auditors need to be independent and competent and have a good working environment to have positive results in the company.