Empirical Research On The Influence Of Non-audit Service On Audit-independence

Non-audit services (NAS), as certified public accountant's (CPA )traditional service items, had already existed while audit services were growing vigorously. However, within quite a long time, audit wasregarded as the key business of CPA profession, while non-audit services did not arouse people's attention. Since 1970s, the fierce market competition has offered good opportunity for the development of non-audit services. Non-audit services gradually became the most potential value-added services. By 1990s, non-audit services have made more profit than audit services, and grew up to the main profit-earning service items of CPA firms.Independence is the key to the moral of CPA owing to its close relationship to survival of the CPA business.With taking diversification strategy and expanding NAS, many foreign CPA firms have grown up quickly. With the development of NAS steadily, the argument that NAS may weaken audit independence has been heated gradually. More and more people think that CPA shouldn't provide audit and NAS at the same time.Whether the provision of NAS could impair audit independence of our country in the present stage, is worthy of studying.Study on the impact between non-audit services and auditor independence can be traced back to the seventies of the 20th century. Today, we still haven't draw an unified view in this field. Some scholars think that the CPAs can strengthen their independence by offering NAS. Some scholars think that it is apt to cause confusion of CPA's role and may build up economic dependence between CPAs and their customers when CPAs offer NAS to their auditing customers, and auditor independence may be weakened. In fact, the revenue percentage in NAS has been increased steadily. NAS has taken the place of audit and become the"leading role"in the business system of CPA. Companied with the development of NAS, the argument has been heated. At the end of 2001, with the collapse of Enron Corp, Arthur Andersen , one of the " big five " CPA firms broke down too.1.Main content of the article ChapterⅠIntroductionPart one proposes the research background of the article, then proposes the question: whether the NAS has affected the audit-independence in China? Then proposes the goal of the article, that is after summarizing the domestic and foreign research achievements about the NAS, disscussing the develpoment of the CPA firms from the angle of NAS and audit-independence's relations. Part two proposes the research techniques, that is union of standard and empirical research.Part three expounds the content of the article, outlines entire article's frame strcture drawing.Part points out the innovation and the insufficiency of the article. ChapterⅡBasic outlines of NAS and Audit-independenceThis chapter is a research theory upholstery, also serves about NAS and audit- independence. The first part of this chapter is NAS's theories. At the very beginning, fromdifferent classified methods about NAS of the United Nations and IFAC and AICPA, we draws the limit about NAS of the article, which layes the foundation for the later empirical research. Next, we expounds agent of NAS's development. Finally,we elaborates the development course of NAS in foreign countries.The second part of the chapter is audit-independence's theories. Audit- independence is a question that we emphasis, because if we want to know the relation between NAS and audit-independence, we must know what it is.Firstly, we explains what audit-independence is, then proposes that it is onekind of subjective probability from the economic angel, thus expounds audit-independence's significance in other side.The third part discusses the relation between them from economic angel. At the very beginning, we explains the CPA's dual characteristic as well as the relation with audit and non-audit from public economic's angel. Next, we explains the ralations between CPA, the owner and the operator from agent theory.Finally, we explains the relation between them from tent-seeking theory angel. ChapterⅢLiterature summaryThe chapter has two main parts, summarizes the prodecessor's research results from domestic and overseas separately.Part one is the overseas research. At the very beginning, we summarizes the standard research from overseas. The standard can provide the union standard for audit theory, then instruct and optimition the audit partice. The next is empirical research from Schulte who most early conducted this aspect real diagnosis research to today, summarize empirical research for several dozens years. The overseas scholars experienced this question from the simple to the complex process, the method diverses more and more, the models are more scientific, the variable establishment also have followed the time development step, it may be said to have the great accomplishment.Part two is the domestic research. Because domestic research is relative later to this question, moreover mainly the standard research, the author enumerated the representative domestic scholar's research results.ChapterⅣEmpirical researchThis chapter is the article's core. The author carries on the real diagnosis analysis with Excel and SPSS12.0.Part one is research design.(1)The data collection, the article enumerats some conditions of data collection as well as the data origin.(2)The target selection, including the dependent variable, the independent variable, the control variable selection.(3)The research supposition, this article research supposition is: NAS do no harm to audit-independence.(4)The model is: Ln(p/1-p)=β_o+β₁totalfee+β₂feeratio+β₃lnasset+β₄dta+β₅currat+β₆roe+β₇naps+β₈croe+β₉inventory+β₁₀receivable+β₁₁current+β₁₂asize+β₁3tenure +εPart two is empirical analysis.(1) The overall situation about disclosure of audit and the non- audit service. (2)The sample company's description statistics, including the sample company's profession distribution statistics, influence which the CPA firms's scale on the audit report's opinion type description statistics, influence which listed companies characteristic on the audit report's opinion type description statistics.(3)The correlation analysis.(4) Regression analysis.Part three is the empirical research conclusion and limitation.This article collects the listed companies's data in the stock market from 2002-2005, examined certain factors which influence the audit opinion type, drawing the following conclusion: NAS does not affect CPA's audit-independence.Finally, we proposes some insufficiencies and laterwill study tentative plans.ChapterⅤThe present situation of NAS in China and policy suggestionsPart one is the present situation of NAS in China, explaining that NAS is at the beginning stage.Part two is the necessity and the feasibility of NAS's develpoment in China. Part three is the policy suggestions of NAS in China, including further standarding disclosure of audit and non-audit expense, limiting NAS's type which the CPA firms provides, and so on.2. The characteristics, main contribution and insufficiency of the articleCharacteristic: The article has standard and empirical research, both have support theory and data. Moreover, the article carries on the theory explanation unioning economic principle, this is an characteristic which this article studies. Main contribution: Although predecessor have conducted the correlation research, because many policies allare along with the time change, then the economic information is unceasingly changing, and the author collects the quite recent data, thus the result is new. Moreover, the author makes the certain improvements about the modles under the foundation which the predecessor studied, and receives the quite good effect.Insufficiency: Because author's level is limited, it has insufficiencies both in theory research and empirical research, including the following aspects:(1)The konwledge I have learned isn't both insufficient and broad, so the theory dynamics is insufficient.(2)In the view of the fact that data collection is difficult, the data has error possibly.(3)Some variables establishment of the model is possible unreasonable.