The Assessment System For Audit Quality Of Accounting Firm In China

Audit qualities of different accounting firms vary significantly. Many factors including auditor business culture, auditor internal control process, auditor organization structure, auditor size, auditor education, auditor reputation and penalties for auditors can reflect the variety. Measurements of these factors help to indicate audit qualities of different accounting firms. The assessment system for audit quality of accounting firm can be set up in the framework. Logistic regression based on data of accounting firms in China shows that entity size, auditor education and auditor reputation are positively associated with audit quality, while penalties for an auditor is negatively associated with audit quality. People can make use of the assessment system to recognize accounting firms of different audit quality. The assessment also urges accounting firms to achieve higher audit quality.