An Empirical Study On The Factors Affecting Audit Fees In Chinese Listed Companies

With economic development, the number of listed companies increased and scales expand. At the same time ,problems appear.Fraud cases of listed companies and audit failures of accounting firms, cause investors,creditors, governments and other stakeholders'interests a hugeinfringement. These stakeholders, in order to safeguard their own interests, demand to know disclosure information of listed companies.Thus the content and quality have become increasingly demanded.Therefore, the quality of audits becomes very important.Reasonable audit fees are conducive to safeguarding the independence of accounting firms, thus ensuring audit quality; reasonable audit fees are conducive to attracting and gathering high quality audit professionals and ensure that certified accountants have professional competence, thus ensuring audit quality; reasonable audit fees to guarantee the completion of the necessary workload, thus ensuring audit quality. Audit fees have a very significant impact for audit quality.From the late 70s to early 80s in the 20th century, the U.S. accounting theory community has begun to focus on audit fees. It does empirical tests by taking advantage of the experience data of stock market. In 2001, the United States securities regulators and regulations demanded that the U.S. listed companies disclose audit fees and promoted the development of empirical research. Therefore, the research onaudit fee is necessary.In 2001, Chinese Securities Regulatory Commission required that listed companies in China clearly disclosed the remuneration paid to the firm in the accounting report. it provided favorable conditions for empirical study of audit fees,allowing stakeholders to learn more about the useful information related decisions including auditing fees.Study of current audit fees could not reach a consensus. The influence factors of audit fees and study are complex. It is difficult to form relatively uniform measure indicators as explanatory variables. The theoretical model of audit fees also failed to reach an agreement.Theoretical significance of this study is to study the intrinsic relationship between audit time and audit fees, and expand ideas of audit fees theoretical research by audit time. By selecting reasonable alternative indicators, it improves audit fee model. It making relevant policy recommendations expands theory of the audit fees. It provides guide on audit practice.The practical significance of this paper is based on theoretical study of explanatory variables .By audit time, It affects audit fees and makes relevant policy recommendations. By an objective analysis of audit fees, it identifies a reasonable audit fee;It guarantees audit quality and does its true objectivity and impartiality. It safeguards the interests of stakeholders to promote the healthy development of capital markets and achieves social local welfare-maximizing.In this paper, by combining standardize the research and empirical research method, based on the analysis, it refines main factors of audit fees. Then it collects annual report data of 633 samples from2005 to 2008,coming from A shares listed companies of China's Shanghai and Shenzhen, and makes an empirical analysis using Eviews5.0.The results showed that: firstly,The main explanatory variables of 2008 audit fees are 2006 and 2007 audit fees, 2008 enterprise assets and 2008 inventory turnover rate. Secondly, audit time is significant to audit fees. Thirdly, The audit fees model with bulk samples, indicate audit fee is reasonable. It is reasonable that the formation of the audit fees is made by accounting firms and enterprise.Compared with the past audit fees, this paper has innovations in the following areas: Firstly, by audit time, it does a study between explain variables and audit fees. Secondly, it brings the previous period of audit fees. It is intended to enhance the explanatory power of audit fees. It draws appropriate conclusions and makes relevant policy recommendations.In this paper, there are some limitations: Firstly, it only selected audit fee data of Annual Report from 2005 to 2008. Explanatory variables are simple and it can not exhaust all the explanatory variables. Secondly, because some listed companies disclose information asymmetry, it finally selected the complete figures of 633 listed companies.