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The Contrast Research On Audit Quality Of The Local And Overseas Auditor Firms In The Audit Market In China

Posted on:2006-12-05Degree:MasterType:Thesis
Country:ChinaCandidate:F J YangFull Text:PDF
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Since the foreign auditor firms entered the Chinese audit market, they get the trust of the Ministry of Finance, CSRC and listed company relying on advanced inside management, professional technique and professional experience. In the last few years, with the rapid development of the foreign auditor firms in the Chinese market, they expanded the scale and improved the occupational rate of market constantly in China by setting up representative offices or co-partnership firms. But comparing with the rapid development of the foreign auditor firms in Chinese audit market, the research on the behavior of the foreign auditor firms lagged behind relatively in audit theoretical circle. Whether the foreign auditor firms will adjust their behaviors or not and whether their audit quality can be more superior to the local ones or not in Chinese market, where its audit market is out-of-balance and the legal liability is absent. In recent years, some scholars have paid attention to this question, but they were mostly concentrating on the analysis that is carried on theoretically, few people have proved the inference of the theory through scientific and systematic method. Just for the reason the thesis applied empirical research to test the audit quality of Chinese and foreign auditor firms with experiential data of the capital market.Firstly, this thesis confirms the research frame of listed companies' audit quality by drawing lessons on the theoretical foundation and research methods home and abroad. Secondly, the thesis analyzes the audit quality of local and foreign auditor firms under the background of Chinese peculiar audit system. At last, the thesis focuses on earnings management and auditor changes to empirical analysis about comparison of their audit quality, looking on listed companies of Shenzhen Stock Exchange from 2000 to 2003. Through the empirical analysis the thesis finds that the audit quality done by local and foreign auditor firms has no remarkable difference, but their customers' financial characteristic has prominent difference. The larger listed companies incline to select the foreign audit firms and would like to pay great amount ofexpenses for them. Therefore, the foreign audit firms can't keep high audit quality in China, but can rely on their brands and reputations to have very strong competitiveness in Chinese market. So the thesis believes that if our local audit firms want to meet opportunities and challenges brought by the open-up of audit market, they should establish extensively high brands. In addition, the government should offer a good environment for the development of the home audit firms actively too, give the home audit firms some trust and should handle the relationship between home and abroad correctly.
Keywords/Search Tags:Audit quality, Earnings management, Auditor changes
PDF Full Text Request
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