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This study aims to determine the impact of corporate digital transformation on the audit opinions of auditors in A-share nonfinancial listed companies in China. It also examines how corporate internal control and corporate social responsibility (CSR) disclosure levels moderate this effect. This study fills a gap in the literature by investigating the impact of digital transformation on business performance, especially in the Chinese context, where digital transformation is rapidly progressing. This study also offers practical guidance for practitioners on whether and how to undergo a digital transformation and enhance their internal governance and social responsibility practices.

This study uses a sample of 2,637 Chinese A-share nonfinancial listed companies from 2009–2022, after excluding firms with ST, ST* or PT status; negative revenue; and missing data for three or more consecutive years. Digital transformation index data is collected from firms’ annual reports, and the other microlevel data from the Wind and CSMAR databases. The authors winsorize the data at 1% for outliers, resulting in 17,305 firm-year observations. This study uses fixed-effects logistic regression with clustered robust standard errors to analyze the binary dependent variable. This study also performs various robustness checks, such as probit model, multilevel fixed effects model and IV 2SLS estimations, to confirm the validity of the results.

This study reveals that digital transformation leads to standard unqualified audit opinions, meaning that companies that invest more in digital technologies and capabilities has more tendency to receive standard unqualified audit opinions, which signify the reliability and credibility of their financial reporting. This study also finds that corporate internal control and CSR disclosure levels positively moderate the effect of digital transformation on audit opinions. This study further conducts heterogeneity analysis and shows that the positive effect is originated by the state-owned enterprises, firms audited by non-Big4 auditing firms, firms with high internal control levels and firms with low CSR disclosure levels. The results are robust to different econometric methods.

This study contributes to the literature by providing empirical evidence on how digital transformation influences audit quality and credibility and how internal governance and social responsibility practices strengthen this influence. This study also has practical implications for practitioners by providing advice on whether and how to pursue a digital transformation and improve their internal governance and social responsibility practices. This study demonstrates its originality by reviewing the existing literature from three theoretical perspectives: stakeholder, signaling and reputation, and identifying the research gap that the study addresses. This study also compares its findings with previous studies and discusses the implications and limitations of its research. This study also proposes directions for future research based on its findings.

We develop a credit-risk model to study the informational role of investment in an economy susceptible to large liquidity shocks. Firms' investment decisions carry information about their asset quality, thereby mitigating informational frictions when firms enter bankruptcy. An increase in aggregate investment can reduce the informational value of investment, depressing firms' recovery values. Therefore, policies boosting investment can decrease debt and firm values by reducing the informational value of investment. The presence of debt overhang may enhance firm value by making firms' investment decisions more informative. We present suggestive empirical evidence consistent with model predictions on the relation between firms' investments and recovery rates.

The paper aims to discuss the amended provisions relating to protection of minority shareholders (PMS) in the newly amended Chinese Company Law and evaluate whether it adequately protects the interests of minority shareholders.

In total, 26 cases will be examined by discussing the characteristics of the relevant parties involved, specifically plaintiffs, defendants, their lawyers, judges and also the grounds of complaint. A comparison will be made between the cases decided by following the first Company Law (1994) and the cases decided in accordance with the newly amended Company Law (2006).

The findings indicate that the amended Company Law has removed certain drawbacks in PMS present in the first Company Law (1994) but the New Company Law can protect interests of minority shareholders only to a certain extent. Further amendments are still needed.

This is one of the first studies to actually examine the implementation of PMS‐related provisions in the newly amended Company Law.