Top Management Turnover, The Formation Of The Audit Committee And Audit Quality

In this paper, listed companies in China 2002-2009 to replace the basic perspective of company executives, the main executives of the turnover of the external audit of the company and the market reaction, based on this study, but also examines the internal audit committee in overseeing Certified Public Accountants and the appointment of managers and to ensure the effectiveness of auditor independence and other aspects. Conducting empirical research company executives replaced, the successor to the company executives replaced in accordance with the source, timing of the reasons for the turnover and turnover of broken down, made a series of empirical results, the results show:1. In the matter of the external audit of the accounting switching:(1) switching the accounting firm executives of listed companies, chairman of turnover was significantly positively correlated; (2) changes in accounting firms and company executives were replaced, chairman of unconventional significant positive correlation; (3) change the accounting firm executives, chairman of the company from external sources was significantly positively related to change; (4) change the accounting firm executives, chairman and CFO in the second half turnover and turnover of the second half was a significant positive correlation. Also verify the accounting firm to change and the relevance of other control variables in order to further reveal the impact of switching in accounting firms of listed companies the relevant factors.2. For the independence of external auditors:(1) change the accounting firm the independence of the audit was not significant; (2) switching in the executive chairman of the company for turnover significantly affected the independence of the audit; (3) turnover of the internal sources of company executives on the audit independence was not significant; (4) The chairman of the company executives on the audit of the independence of the normal turnover significantly affected; (5) the office of executive chairman of the first half of the turnover affect the independence of the audit; (6) CFO successor to the high educational background and titles and significantly affected the independence of the audit.3. The impact on audit quality:(1) change the accounting firm reduced audit quality; (2), chairman of the company executives more likely to reduce audit quality turnover; (3) non-executives in the normal turnover of chairman, turnover of external sources significantly reduce audit quality and significance; (4) Replace the second half of the company executives, chairman and CFO in the second half to make it easier turnover of audit quality; (5) audit quality and the background of a successor CFO title not relevant. 4. In the impact on earnings quality:(1) switching in accounting firms likely to cause a decline in earnings quality; (2) The CEO and CFO executives turnover reduces earnings quality; (3) non-conventional turnover CEO on Earnings significant impact on quality; (4) executives, Chairman and CFO to replace more concerned about the second half of successor non-recurring income, and earnings quality has been affected.5. In response to the market:(1) change the accounting firm negative correlation with the market return; (2) replace the executive chairman of the board is positively correlated with market returns;(3) turnover of external executive succession is the source of the market not significant; (4) executives unconventional CEO and the market return of negative contrast change; (5), executives, chairman, CEO and CFO in succession with the market return on time was not significant; (6) CFO of higher education titles background on market returns negative.6. In the case of an audit committee of the performance:(1) The Audit Committee did not change the public accounting firm has a direct impact, but in the group return to the case of an audit committee of the company significantly limit the turnover for CPA CFO The impact of changes; (2) Audit Committee for audit independence was a significant negative correlation, which to some extent, that the independence of the Audit Committee's effectiveness in the audit. Chairman of change and the establishment of the independence of the audit and an audit committee is not grouped regression case, the results demonstrated significant differences, indicating that the establishment of the audit committee of listed company's audit committee to play a certain role, limitations and weakened the chairman of the Audit Independence;(3) The Board of maneuverability was a significant negative correlation between the profit that the company set up by the Audit Committee, maneuverability small profit, in other words the Audit Committee to improve the audit quality; the establishment of the Audit Committee and the Group Audit Committee did not return to the circumstances, the Audit Committee to effectively prevent the manipulation of profits of listed companies manipulate and improve audit quality; (4) The Audit Committee is the impact of earnings quality is not significant, the Audit Committee in the group is not the case with the group accounting firm for the change and turnover of chairman, CEO turnover, CFO regression results do not change significantly; (5) establish an audit committee and the market returns were significantly positive correlation (mixed regression), sub-annual return the most significant in 2004.