Empricial Research On The Relation Between Internal Corporate Governance Mechanism Earning Management And Audit Quality

Based on the prior literature and theory,we work out the abnormal accruals through regression the on modified Jones modle by using 499 samples from shanghai and shenzheng stock exchange during 2004-2007.Through descriptive statistics, and by matching listed companies which have contrary audit opinion paired,we found that only in 2006 and 2007 the earning managment of listed companies which have contrary audit opinion are significant different with each other, China's certified public accountant are capable of identifying the earnings management behavior. Through the establishment of the model contains corporate governance factors earning management and audit quality, we draw a conclusion from this regression analysis:the higher the level of earnings management, auditors audit the higher the possibility of failure, therefore, the higher the audit fees. Largest shareholder is state-owned shares, or state-owned shares of listed companies the higher the level of earnings management, the lower audit quality, indicating that auditors in the audit of such companies is difficult to determine their audit techniques or limited scope of the auditing resulted in the low audit quality.The relationship between audit quality and the prorotion of shares of the largest shareholder can be described as an inverted Ushape. The proportion of the outstanding shares negatively correlate with the quality of audits. The second to the top ten shareholding ratio,the number of board meetings, board size, the proportion of independent directors have a positive impact on audit quality, while the number of meetings of the shareholders have a negative affect to the quality of audits. In addition the audit quality of the top six accounting firms is higher than the nontop-six accounting firms's. We also find that audit quality has been improving after the reform of share market...