Research On The Influence Of Audit Fees On Auditing Independence

Auditing independence is the soul and the natural character of CPA auditing, and it is CPA's the guarantee to show objective and impartial auditing opinion. Auditing independence is concerned specially. And it is a complex issue. There are so many factors that can influence auditing independence, but audit fees are very important factor. Audit fees are the economic tie that link CPA and audit client. Based on the theory and case analysis, and empirical test, this paper tries to inquire into the specific influence of audit fees on auditing independence. Then some suggestions about how to improve the system of auditing fees and how to enhance the independence of CPA auditing in China are presented. The influence of audit fees on independence can be summarized the next factors. Firstly, the accountant firms acquire audit fees directly from the audit clients, so the firms are economic link with the clients and they lack independence in economic. Secondly, if the income of firms relies on some client serious, the firms can yield to the pressure of client's management personnel and can't keep independence. Thirdly, if the audit fees that the firms charge is obvious lower than the average, the firm's behavior can be "low-balling", and the "low-balling" is to gain the client's long-term contract. Fourthly, if the payable audit fees aren't paid, and they aren't paid until the next auditing time, then the clients become to be the debtor of the firms to some extent, so it can harm independence. Fifthly, if the proportion of non-auditing fees in all fees is very large, it can affect the independence because the firms participate in the client's decision excessively. Sixthly, presently the low audit fees improperly affect audit procedure and time budget in china, so it affects the independence.