The Impact Of Auditor Industry Special Expertise And Tenure On Audit Quality

Audit tenure and industry special expertise both are the factors which impact the audit quality. The effect of audit engagement to the securites business is reducing the anisomerous information. And the audit quality is the key to it that the function is working well. To some extent the auditor industry expertise that is part of the professional competence, while at the same time affect the independence of the audit term of office and professional competencies. That is the industry expertise to influence audit quality, while the impact of industry expertise through the audit term impact on audit quality, but also on the other hand be affected by affecting the independence of audit quality.AICPA auditing standards issued in recent years, as well as the emerging risk-based audit techniques require the auditor industry expertise will be integrated into their audit technology, so that the auditor industry expertise into the audit market as a minimum threshold. In 1998, AICPA industry expertise as the impact of CPA will be the future development of five key factors. From China's Independent Auditing Standards of view, understanding of the industry customers are located is also a basic requirement for auditors. The China Securities Regulatory Commission and the Ministry of Finance jointly issued a "signing on the Securities and Futures audit services provided regular rotation of Certified Public Accountants," Annual Report of the audit of listed companies signed the business conduct of regular rotation of Certified Public Accountants has a mandatory requirement, and clearly defined in general under the signature of Certified Public Accountants to provide a continuous audit services for listed companies shall not exceed five years.Against this background, some domestic scholars have come to the current situation of China's audit market, audit quality is negatively correlated with industry expertise, mainly due to China's current market imperfections and audit independence worse. However, some scholars pointed out that China's industry expertise for earnings management have certain constraints, and this also shows that industry expertise to be able to a certain extent, improve the quality of auditing. Are also some foreign scholars have pointed out, with the weakening of the legal environment, industry expertise, for the positive impact the quality of earnings increase, that is, in our current legal environment is still not perfect market, industry expertise, the restrictions for the role of earnings management should be more apparent. For the audit term, due to the introduction of mandatory rotation requirement, the argument is also very intense. With the audit of the quality of what is a positive correlation between the Negative correlation? Or a non-linear? So far there is no one conclusive.Audit tenure and industry expertise to the impact of audit quality how? This article is a preliminary exploration in this area in order to become bigger and stronger in the AICPA for the firm to produce economies of scale, the formation of oligopolistic markets, policy-oriented with the Ministry of Finance and the Commission jointly promulgated the "sign on the securities and futures certified public accountant auditing regular rotation requirement "as the background, from the theoretical analysis of industry expertise and audit the impact of tenure on audit quality, the degree of earnings management through measuring the level of audit quality and change in previous studies to the possibility of issuing non-standard audit opinions and audit alternative variables to measure the independence of the audit of the quality of striving for the improvement of the existing system and how effective recommendations to improve audit quality.