The Empirical Study About The Financial Restatement And Audit Fee Of China Listed Company

Since the last mid-90, Regulatory and auditor and academics has paid more attention to financial restatements. Through reviewing existing literature about financial restatements, we find that the focus of current research is on the relationship between corporate governance mechanisms and financial restatements. However, as an important corporate governance mechanism, there are few studies to research the relationship between audit and financial restatements. We should analysis auditor firms'risk evaluation and risk reaction for financial restatements deeply.We select samples of listed companies on Shenzhen Stock Exchange from 2006 to 2008, this dissertation try to answer two questions:(1)Could audit firms identify the risk of financial restatements, and reflect on the audit fee?(2)Whether audit firms could select different audit fee for financial restatements of different types?This dissertation find that:(1) audit firms could identify the risk of financial restatements, and try to charge a higher audit fee to financial restatements. (2) audit firms could identify different types of financial restatements, and charge a higher audit fee for core restatements caused by sales, cost of sales and selling expenses.