A Study Of The Effects Of Voluntary Accounting Policy Changes On Auditor Changes

In recent years, there are an increasing number of listed companies that change their auditors. There are also an increasing number of Chinese listed companies that have disagreements with their auditors after taking voluntary accounting policy changes. These companies will have a tendency of auditor changes. While in China the development of CPA profession and listed companies has just started, the research of this field is too scarce. So, this essay, based on a sample of all the Chinese A-share listed companies that taking voluntary accounting policy changes between 1998 and 2002, studies the influence of voluntary accounting policy changes on auditor changes. The author believes that this research can regulate Chinese capital market, strengthen auditor independence and improve the quality of accounting information. First, this paper analyzes the influence factors of changing auditors. This part is divided into two parts: one is from the point of view of the listed companies; the other is from the point of view of the auditors. Second, this paper analyzes the influence factors of auditor-client disagreements that caused by listed companies'voluntary accounting policy changes. Last, empirical study has been taken on the effects of the degree, direction and character of voluntary accounting policy changes on auditor changes. The empirical study includes the descriptive statistics of voluntary accounting policy changes in China at present, independent t-test, X2 test and logistic regression. Through the analyzes above, the major empirical results are summarized below: ①In order to take earnings management, the Chinese listed companies that have taken voluntary accounting policy changes will have the tendency of changing theirs auditors. ②When there are disagreements on voluntary accounting policy changes between auditors and clients, the listed companies will change their auditors. The disagreements are focus on the degree and the character of voluntary accounting policy changes. ③The degree of voluntary accounting policy changes correlate positively with the auditor changes.