Research On The Influence Of Audit Committee Construction On The External Audit Quality

McKesson & Robbins fraud case promoted the audit committee system. Many countries in the world began to establish the audit committee system after that, and Chinese government also introduced audit committee system in 2002, and gradually improved the system during the next few years. By the end of 2010, all of the listed companies have established the audit committee, and formed the audit committee work conditions. Along with the concern about corporate governance, as the special committee under the board, the audit committee and its operation mode and effectiveness also received extensive attention. The audit committee can impact not only internal audit quality and external audit quality, and this dissertation selects the influence of the characteristics of audit committee on the external independent audit quality as the research topic, and hopes to put forward proposals on the construction of the audit committee in terms of improving the quality of independent audit.Based on a review of studies around the world, this paper theoretically analyses every characteristics of audit committee and its influence on the independent audit quality, and states the research hypothesis at the same time. In order to more comprehensive measure of audit quality, this paper uses earnings management degree and the audit firm size hired by companies as substitute variables of the external audit quality, these also are the dependent variables, uses the age, size, meeting times, independence, specialty and the average education degree of the audit committee as the explanatory variables, and then according to the different dependent variables, designs two different research models, and checks the models by using linear regression and binary Logistic regression. The result indicates that there is significant negative relationship between the size of the audit committee and earnings management degree of the company; there is significant positive relationship between the independence of the audit committee and the audit firm size hired by company, so is the specialty and the audit firm size; there is positive relationship between other characteristics of audit committee and external audit quality, but not significant. According to the results, the paper puts forward corresponding enlightenment and suggestions, hoping to improve the audit committee system by optimizing the construction of audit committee, improve the independent audit quality, and enhance the effectiveness of audit committee.