Research On The Association Between Internal Control And Audit Pricing Of Company

Audit pricing is the price which decided by the supply and the demand of audit service. Audit pricing, as the important economic links connecting accounting firms and audited firms, influences the auditing function. So the audit pricing research is a very important field of audit study. The empirical studies of listed companies audit pricing influence factors started in western during the 1980s. But our country makes our audit pricing empirical research become reality in 2001 when the China Securities Regulatory Commission issued the regulations that listed companies must disclose the remuneration paid to accounting firms in its annual report.The date we used is based on the listed companies in Shenzhen Stock Exchange from 2008 to 2009, in order to explore the correlation between the quality of internal control and auditing pricing, focusing on whether there exists internal control problem and the severity of Internal control problem.it used the factors that the serious level of the problems, as explanatory variables, measure the quality of the internal control in order to investigate the current quality of internal controls of listed companies on audit pricing. Study find that whether the listed companies exist internal control problem and the severity of Internal control problem. Besides, these are positively correlated with audit pricing. (It means the quality of internal control negatively correlated with audit pricing). It also find that whether the listed companies have significant relationship with audit pricing, but the relationship between the severity of Internal control problem and audit pricing is not significant enough. This conclusion is in line with China's actual situation. In our China's market, the quality of internal control has an impact on auditing pricing. But at present our country's self-evaluation report quality is not high, which resulted the severity of Internal control problem is not significant related to audit pricing in this paper. We find the most important factors of audit pricing, such as:the total asset scale of listed companies, the number of the consolidated subsidiaries, assets-liabilities ratio, and the region factors of listed companies and whether it is audited by the "big four" all of which have a significant positive correlation of audit pricing.