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The doctoral dissertation of Meng Guo's, M.Sc “Essays on Institutions and Assurance” will be publicly examined at the Aalto University School of Business on Monday, April 27, 2026.

The public defense will be held at the Aalto University, School of Business, lecture hall U006, 12.

Opponent: Professor Ann Vanstraelen, Maastricht University.

Custos (Chairperson): Professor Lasse Niemi,  Aalto University School of Business.

The thesis examines how formal institutions and informal institutions influence clients' decisions of assurance services and auditors’ behaviours.

The first essay investigates whether generalized trust influences auditor-provided nonaudit services. Using a sample of European listed firms, the essay documents a positive association between generalized trust and auditor-provided nonaudit services. The essay implies that generalized trust, as an informal institution, influences auditor-provided nonaudit services. 

The second essay explores whether the institutional environment influences clients’ decisions of sustainability assurance. This essay leverages the PESTLE framework to evaluate macro-environments by performing the exploratory factor analysis of country attributes. Using a sample of European listed firms, the essay documents that clients in weak institutional environments are more likely to demand sustainability assurance, engage financial auditors, especially Big 4 auditors, as assurers, appoint the same assurer for both financial statement audits and sustainability assurance, and require assessments of a comprehensive scope of sustainability information. The essay signifies the important role of formal and informal institutions in the European sustainability assurance market.

The third essay examines whether regulatory enforcement against exam cheating scandals influences audit quality. Using a sample of U.S. listed firms, the essay documents that auditors involved in exam cheating scandals are more likely to issue adverse internal control opinions after regulatory enforcement. The essay demonstrates the deterrence value of regulatory enforcement, as a formal institution, in constraining audit firms’ unethical behaviours.

Each essay explores distinct aspects of the institutions and provides novel insights into how various institutional features shape auditors’ behaviours and clients’ decisions of assurance services. As trust is the value proposition of assurance services, the findings of the three essays collectively demonstrate that both formal and informal institutions are crucial in sustaining trust in assurance services provided by the auditing profession.

Further information:  
Meng Guo
Email: meng.guo@aalto.fi

Link to the doctoral thesis: