An Empirical Study Of The Determinants Of Audit Fees Based On Corporate Governance

Facing the revolutionary change in global economy, external auditing takes an indispensable supervision function to enterprise's management and operation as independent third party and has been given our exclusive attention from all walks of social life. The standard of audit fees have become an important research subject to ensure the economic link between CPA and audit clients can not only make independent audit reach its purpose but also maintain their normal operation. Until now, there are large numbers of empirical study on determinants of audit fees. This research targeted for optimizing audit charge market, rationally allocating economic resources and achieving the win-win goal through grasping its remarkable influence factor.Based on corporate governance theory and audit pricing theory, this thesis firstly expound the relationship between corporate governance & audit fees from audit risk and agency cost, then decided test variables according to governance structure and china's present condition on corporate governance,and finally established a determinants model of audit fees based on corporate governance after combining the conclusions from the former. This thesis made data processing and analysis on established model through empirical method and concluded that audit fees and controlling shareholders of state-owned status have significantly negative correlation under the level of one percent; audit fees and tradable stock rate have significantly negative correlation under the level of five percents; audit fees and the number of board meeting have significantly positive correlation under the level of ten percents. In the end, this thesis suggested for improvement of company's corporate governance and audit charge market. There are three suggestions about how to optimize corporate governance: improving the institutional investor's speed of participating in corporate governance of listed company; upgrading the board efficiency; merging the board of supervisor in audit committee and expanding its right. At the same time, this thesis advanced three suggestions to optimize audit charge market: perfecting governance structure of listed companies and cultivating"high-independence"audit requirements; training high-quality accounting firms and expanding the concentration effect on audit fees; formulating a scientific standard about audit fees and detailing information disclosure rules of audit fees in annual report.