臺大管理論叢 NTU Management Review VOL.30 NO.2

27 NTU Management Review Vol. 30 No. 2 Aug. 2020 H1: Compared to a single-signature system, the probability of issuing non- unqualified opinions is higher under the dual-signature system. An auditor’s liability is an important factor that affects audit quality. Legal risks for public firms are higher than those for private firms. (Ball and Shivakumar, 2005; Chaney, Jeter, and Shivakumar, 2004). Auditors are likely to become more cautious and skeptical when they audit public trading firms. As a result, the effects of dual-signature systems may be more pronounced for publicly traded companies than for other companies. Based on this argument, the second hypothesis is as follows: H2: Compared to a single-signature system, the probability of issuing non- unqualified opinions to publicly traded companies is higher than other companies under a dual-signature system. 3. Research Design 3.1 Sample This study obtains data from the TEJ (Taiwan Economic Journal) data base. The initial number of observations is 105, 118, 121, and 124 in the years of 1981, 1982, 1983, and 1984 respectively. Financial companies and observations with missing values are excluded. The final sample includes 296 observations, which are composed of 199 dual- signature observations and 97 single-signature observations. 3.2 Models The following logit model is used to estimate the effects of dual-signatures, MAO = β 0 + β 1 DUAL + β 2 PUBLIC + β 3 SIZE + β 4 LEV + β 5 CURR + β 6 LOSS + β 7 BIGN + INDUSTRY + ε, (1) where the dependent variable “ MAO ” is an indicator variable for an audit opinion. MAO equals 1 if the auditor issues a modified or disclaimed opinion. The explanation variable, “ DUAL ,” is an indicator variable that equals 1 for dual-signature observations and 0 for single-signature observations. The control variables are defined as the following: “ PUBLIC ” is an indicator variable that equals 1 for firms listed on Taiwan Stock Exchange and 0 otherwise. “ SIZE ” is the natural logarithm of total assets; “ LEV ” is the ratio of debt to total assets; “ CURR ” is the ratio of current assets to current liabilities;