The Impact Of New Audit Standard On Auditing Quality

Audit quality problems have been plaguing the accounting profession in China, a series of audit failure cases, seriously affect the credibility of China's CPA, and hampered the development of securities markets. After IAASB issued International Auditing Standards in 2003, the world began to try to achieve the international convergence of auditing standards In order to improve the quality of our audit, and realize international convergence of auditing standards, the Ministry of Finance issued the new auditing standards in February 2006, and the new standards have been implemented in all accounting firms in China since 2007.The paper analysed the impact of the implementation of new auditing standards on audit quality, and empirically explored the improvement of audit quality since the implementation of new auditing standards. Through the theoretical analysis, this article considered the new auditing standards will effectively control audit risk, identify responsibilities of CPAs, enhance the practice level of CPAs, and improve efficiency. These are all the positive impacts on audit quality. In short term, the increase in audit fees and the increasing pressure impact audit quality on the negative, but in long term, with the improvement of the ability of CPAs, and the further improvement of audit efficiency, audit costs will inevitably fall, its negative impact on audit quality will gradually diminish. Therefore, this new auditing standards that will improve audit quality. Through referring to previous researcher, this paper chose the reflection of audit opinion to earnings management as the substitution variables of audit quality, used the Modified Jones model and logistic regression models to analysed the improvement of audit quality from 2005 to 2008. The results show that the audit opinion revealed the audit unit of earnings management, and implementation of new auditing standards improved audit quality to some extent.