Research On Auditor’s Team Characteristics And Audit Quality

Audit quality is fundamental to the CPA industry in terms of its existence and development.Factors that affect the audit quality have always been a focus among the practical field and academic circle.Studies on the factors of audit quality mainly concentrate on the following three aspects:the audit environment,the units under auditing,and accounting firms.Concerning accounting firms,relevant researches have been refined from the overall researches on accounting firms to researches on auditors who affect the audit quality,such as the auditors’ gender,age,education,profession,political affiliation,position and so on.However,there have few studies of the audit team level which is the internal organization structure between the firm and the individuals in auditor teams.Auditing involves teamwork that requires team members collaborate to improve work efficiency and issue audit reports.Even if the individual auditors have been equipped with professional abilities,ill collaboration will directly affect the audit quality when they participate in the work.That is to say,the impact of the audit team collaboration on the audit quality exerts directly a far more decisive role than that the accounting firms on the individual auditors.A study of the influence the team characteristics of certified public accountants(CPAs)on the audit quality will benefit the accounting firms to take advantage of the individual differences to distribute human resources rationally,to set the scientific and reasonable project personnel dispatch system,and to give opportunities for the complementary effect of teamwork,so as to improve the work efficiency of auditing team and guarantee the audit quality.This paper is based on the perspectives of the CPA team.With a literature review of the domestic and abroad researches,this paper demonstrates the influence of cooperation between different CPAs on the audit quality,relates to the special auditing market environment,analyzes other factors and constraints relating to the effects,and then constructs a series of testing models that reflecting the relationship between team characteristics and audit quality which is fit for the special economic environment and institutional background.Taking the models and A-share listed companies from 2007 to 2015 as examples,conclusions has been made after theoretical deduction and empirical tests of the gender collocation,experience collocation,and the influence the cooperation experience on the audit quality respectively.As a whole,the conclusion drawn from the theoretical analysis and empirical researches involves three aspects.First,when it comes to the gender collocation of the signing CPA team members and audit quality,according to heterosexual and gender diversity in theory,the effect that is resulted from heterosexual and homosexual collocation on the audit quality is different.On the basis of this theory,a mathematical model is constructed to analyze the impact of the mix match between male and female workers in the same team members on the quality of audit.The results of empirical research show that:(1)compared with collaboration in the same gender,collaboration between different gender signing can significantly reduce the earnings management of audited units,thus it improves audit quality.(2)By further tests,the heterosexual collocation of the members in accounting teams in one of the four largest non-international accounting firms suppressed the earnings management level of the audited units,and thus improved the audit quality.However no significant relationship was found in the four major international groups.(3)Comparing further the different scales of customers,it is found that the heterosexual collocation of members in the signing accounting teams will have a significant impact on audit quality in large customer scale samples.(4)After grouping by work pressure calculated according to the average value of the year signing auditing accountants calculated based on auditing number of customers and total client assets,a conclusion has been made that the complementary effects from heterosexual and gender diversity are better during the high-conditioned environment,i.e.the quality of the teams made from collaboration of male and female signing auditing accountants is higher in the face of heavy pressure.When the work pressure is small,there is no significant relationship between the gender combination of the signing accountants and the quality of the audit.(5)in the robustness tests,when the DA algorithm is replaced,the results of changing samples are still kept fixed.The second point in the thesis is about the experience collocation of the members in the signing CPA teams and audit quality.There are three kinds of combination in the experience collocation of the team members of the signing accountants:the first kind is two experienced members,the second kind is one experienced and two less-experienced members,the third kind is two less-experienced members.According to the theory of mentoring and diversification and complementary effect,different experience collocation of signing accounting team members will produce different effects on audit quality.On the basis of such an effect,a mathematical test model is constructed to analyze the impact of the experience collocation of the three signing team members on the audit quality.The results of empirical research show that:(1)no two experienced certified accountants and only one experienced certified accountant make significant differences on audit quality.(2)Compared with two less experienced signing accountants,the two experienced certified accountants can reduce the accruals earnings management level and improve the audit quality.(3)Compared with the two less-experienced signing accountants,only one experienced accountant can reduce the accruals earnings management level and improve audit quality.(4)in terms of further tests,compared with the two less-experienced accountants,in one of four the non-international accounting firms,two experienced accountants or one experienced accountant respectively can significantly reduce the audit earnings management and improve the auditing quality.However,no significant relationship was found in the four major international groups.(5)Comparing the customers of different sizes,it has been found in the case of large scale customers that with two experienced accountants or one experienced accountant respectively can significantly reduce the audit earnings management and improve the auditing quality,but no significant relationship was found in the small sizes of customers.(6)After grouping by work pressure calculated according to the average value of the year the signing auditing accountants calculated based on auditing number of customers and total client assets,a conclusion has been made that with two experienced accountants or one experienced accountant respectively can significantly reduce the audit earnings management and improve the auditing quality in the face of great pressure.Namely,when there is a well-experienced accountant at least,the audit quality is much higher,but no significant relationship was found concerning the experience collocation of the members in the signing CPA teams and audit quality.(7)In robustness tests,when DA algorithm is replaced,the results of changing the samples are still kept unfixed.The third point in the thesis is about the cooperative experience of the members in the signing CPA teams and audit quality.On the one hand,according to the partner stability effect,the previous teamwork experience of two accountants makes them easy to communicate,so as to reduce the communicative costs in teamwork and improve audit quality.On the other hand,the previous experience of the project manager and the auditor may influence the auditor to review the auditor independence and profession,and then affect the quality of the audit.On the basis of this theory,a mathematical test model is constructed to analyze the impact of the cooperative experience of the signing CPA team members on the audit quality.The results of the empirical study show that:(1)the cooperative experience of the certified public accountants can inhibit the upward earnings management behavior of the audited units,and thus improve the audit quality.(2)a further test show that the cooperation experience of the members of the accounting team in the four international accounting firms inhibits the earnings management level of the audited units and improves the audit quality.However,no significant relationship was found in the four major international groups.(3)Comparing further the different scale of customers,it is found that under the condition of large customer scale,the cooperation experience of the certified accountants team members will have a significant impact on the audit quality.However,no significant relationship was found in the small scale of customers.(4)After grouping by work pressure calculated according to the average value of the year the signing auditing accountants calculated based on auditing number of customers and total client assets,a conclusion has been made that the cooperative experience in the team can significantly reduce the audit earnings management and improve the auditing quality in the face of great pressure,but no significant relationship was found between the cooperative experience of the members in the signing CPA teams and audit quality.(5)In robustness tests,when the DA algorithm is replaced,the results of changing the firms are still kept unfixed.In summary,this paper based on CPA team perspective,select team members signed accountant gender collocation,experience collocation,experience of cooperation in three aspects,the theoretical analysis of CPA team role different characteristics on audit quality of science,and select the A shares of listed companies as the research sample,to construct an test of mathematical model,the conclusion of concrete research,in order to help the users of accounting information more accurate interpretation consists of review auditors and project manager team signed accountant the different characteristics of collocation and its influence on audit quality.In conclusion,the conclusion of this paper is beneficial to the accounting firms use different CPA individual firms,the rational allocation of human resources,establish scientific and reasonable project auditor appointment system,give full play to the team collocation complementary effect,so as to improve the audit team work efficiency,guarantee the quality of auditing.The accounting firms in our country bigger and stronger and better,promoting the "The Belt and Road" in the service level,become internationally recognized high-end accounting firm with a certain reference value and significance.This paper analyzes the effect made on audit quality from the perspectives of gender collocation,experience collocation,and the cooperation experience of the signing CPA team members,and draws a conclusion by taking A-share listed companies as samples to construct the empirical mathematical model in order to help the users interpret the impact of the characteristics of different signing certified public accountants teams constituted by the review auditors and project managers made on audit quality.In a word,this research is conducive to accounting firms take advantage of individual differences to distribute the whole human resources rationally,set the scientific and reasonable project personnel dispatch system,and give full play to the complementary effect of teamwork,so as to improve work efficiency of auditing team and guarantee the audit quality.Moreover,the research also provides certain meanings and reference value for our country’s accounting firms becoming larger and stronger to rank in the internationally recognized high-end accounting firms.