| On a macroscale auditor industry specialization can meet the market demand, and therefore becomes an important factor which propels the capital market to work well. Development of auditor industry specialization can alleviate the problem of information asymmetry more effectively and then maintains and promotes the contractual relationship under economic accountability. Listed companies choose industry specialists as signal to convey information to capital market, which can solve the problem of adverse selection to a certain extent. The auditor, as an industry specialist, is able to fuse the industry knowledge with audit technique, which leads to a decrease of information cost and an improvement of information value, thus optimizing resource allocation. Industry specialization qualified auditors to make information assurance more accurately and objectively, through which agent cost can be reduced and the capital market is promoted to work efficiently.On a microscale the development of auditor industry specialization helps auditors take advantage of scale economy and scope economy, so as to decrease the audit cost and enhances the audit performance. The auditor industry specialization can form a barrier to entry, which prevents the potential competitors and solidifies its dominance in certain industries. Industry specialization qualifies the auditor to provide differential products with high quality, which distinguish itself from non-specialists, thus occupying the leading position.As the changes of economic environment, the audit approaches has involved into strategic-systems audit approach. The role of auditor industry specialization becomes more and more important during this process. Especially, industry specialization makes auditors meet the requirements of strategic-systems audit approach. which helps to decrease the audit risk and improve the audit quality.Because of the theoretical basis mentioned above. many countries write it into standards in order to propel its development. Related regulations in the auditing standards of our country also provide direction for the development of auditor industry specialization.The development of auditor industry specialization can’t be separated from its macro-background——the whole audit market. Based on a statistical analysis of data covering20years since capital market is built, It is proved that monopoly has been formed in audit market nowadays through a constantly perfected process. In this background, the development of auditor industry specialization in last3years shows some characteristics which is illustrated in the dissertation.Theoretical analysis has been made on the problem of influence of auditor industry specialization on earnings quality of listed companies, which is argued through two aspects——earnings management and earnings conservatism. And a further research is made in the light of influence of negative earnings management on the real conservatism。Based on theoretical and empirical analysis, it is discovered that the auditor industry specialization of different angle of view exerts different influence on the earnings quality of listed companies. Generally, the auditor industry specialization measured by industry market share has constrained earnings management and improved earnings conservatism, and the auditor industry specialization measured by industry portfolio share has decreased earnings conservatism and exert no significant influence on earnings management. The auditor industry specialization measured by comprehensive methods is proved to constrain earnings management, but have no effect on earnings conservatism. In the next step, through the empirical analysis on the relationship of auditor industry specialization and both positive and negative earnings management, it is proved that the auditor industry specialization measured by industry market share has actually enhanced the real earnings conservatism, rather than creating an illusion caused by conniving at the negative earnings management by listed-companies.The dissertation is divided into nine chapters. Content in each chapter is as follows:Chapter1is preface, in which the research motivation, background, methodology. content is explicated, as well as the innovation and academic contribution.In chapter2, the definition and research category is firstly explicated. Secondly, based on the theory of industry organization, the necessity of auditor industry specialization is illustrated from two aspects:the audit market structure in certain industry and the market demands respectively. At last, the increasing importance of auditor industry specialization is elaborated on the basis of the evolution of auditing approach.Chapter3illustrates the measure methods to evaluate the auditor industry specialization. Based on the characteristics of each method and the factual situation of auditor industry specialization, the measure method in the dissertation is finally determined. Auditor industry specialization is measured by three methods, i.e. industry market share, industry portfolio share and comprehensive method, three calculating standards, i.e. the total operating income of client, total assets of clients and the number of clients, and in two forms, i.e. the continuous variable form and the dummy variable form.Chapter4analyzes the background of auditor industry specialization development, i.e. the audit market statistically in the first place, and then analyzes and evaluates the current situation of auditor industry specialization development and the distribution of the specialists from the perspective of industry market share and industry portfolio share.Chapter5makes theoretical basis for the empirical research in the following chapters, i. e., makes theoretical analysis on the machanism of anditor industry specialization on earnings quality.Chapter6makes a research on the influence of auditor industry specialization on earnings management. After the empirical test, this chapter explains and evaluates the relationship between auditor industry specialization measured from different angles and earnings management based on the results.Chapter7discusses the influence of auditor industry specialization on earnings conservatism. This chapter explains and evaluates the relationship between auditor industry specialization measured from different angles and conservatism of earnings based on the empirical results.Based on the results and conclusions of Chapter6and Chapter7, chapter8makes a deeper insight into the real influence of auditor industry specialization on earnings quality from the perspective of the relationship between negative earnings management and real conservatism.Chapter9draws a conclusion from the analysis above firstly, and then reveals the limitation of the research, as well as the potential direction in later studies. |
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