The Research Of Correlation Between Non-attestation Services And Audit Independence

CPA providing non-audit services has a history of more than one hundred years, in some of the major international accounting firms, the production of non-audit services was earlier than audit services'.But the study of the influence of non-audit services on the audit independence started in the middle of 20th century. At that time, the famous American Cohen report once studied the problem, but did not draw the conclusion that non-audit services would damage the independence of audit. In the 1990s, non-audit services development reached a peak period, non-audit services charging also increased fast, non-audit services fee has been far more than the audit services fee. This development momentum of non-audit services seems to make some industry organization smell the trace of "threat", therefore, for the purpose of banning the non-audit services, the movement of the independence rules revision which was started by the SEC in 2000 also became reasonable. Although this movement was powerful, the SEC got the strong opposition of AICPA and the "top five".The attitude of the SEC to non-audit services from "ban" into "individual".The outbreak of Enron event in 2001,made the industry "bring up the past",began a new study that non-audit services will damage the audit independence or not, but until today, there is no clear judgment.In China, although the development of non-audit services is less strong than which is in the world. But in order to meet the requirements of internationalization and make our certified public accountants offices have international competitiveness, the non-audit services in our country has entered the industry gradually, and caused people's attention. More and more companies need non-audit services, the non-audit services fees are also increasing, even has exceeded the audit fee. The problem of our non-audit services would reduce audit independence or not, therefore became the attention of scholars.This paper with the most controversial parts in non-audit services----the non-attestation services as the research object, with the data between the year of 2006 to 2008 when our country issued the new standards as the samples, study that non-attestation services in China is beneath the audit independence or not. Through sorting data, the author found that non-attestation services have threatened the audit independence formally, so also are in essence? Based on this issue this paper will discuss the problem further, through which can make people have a basic understanding about non-attestation; also can provide some little help to formulate relevant policies and measures in China.This paper is divided into six chapters, the content of chapters are introduced as follows:Chapter 1:IntroductionPreface part of this paper mainly introduces the background and significance, research methods and research contents and features. Through the method of combining theoretical research and empirical analysis, the author deeply analyze that non-attestation services will adversely affect the independence of audit in China or not in essence, and provide policy suggestions for starting relevant work, and through simple chart describes the research framework.Chapter 2:Literature reviewingThis paper will into two aspects which are normative research and empirical research respectively to interpret the studies of non-audit services on audit independence overseas.Among the normative research, there are four views, namely:non-audit services will damage the audit independence, non-audit services won't harm the audit independence, non-audit services will not only damage independence and help, the influence on audit independence both positive and negative; Empirical studies from the auditing opinions and earnings management and the auditor change three perspectives respectively introduces non-audit services to the influence of audit independence. For domestic research, the author found that the Chinese scholars about the study most of which are on the attitude of neutral, and think that non-audit services have positive effects on audit independence and negative effects.Chapter 3:The related theory research of non-attestation services and audit independenceIn this chapter of theory studies, this paper introduces the American institute of certified public accountants (AICPA) to provide professional services of certified public accountants and Chinese CPA association of professional services of certified public accountants, simple describes division characteristic between the above two, and through comparing the characteristic to verification that the definition and scope of services; introduces the economics theory of non-attestation services----rent-seeking theories, and introduce the rent-seeking behavior of non-attestation in the two aspects of certified public accountings and the auditees.In the research of related theory of audit independence, this paper introduces the concept of audit independence, the potential threats of audit independence, and introduces that in what aspect can non-attestation services threat to audit independence, finally describes the relationship of non-attestation services and audit independence.Chapter 4:The study design of the correlation between non-attestation services and audit independenceStudy design includes four aspects:the assumption, variable settings, samples, the establishment of the choice model.Since the studies of scholars to the influence of non-audit services on audit independence and analyzing about the relationship between the two, this paper puts forward assumption:non-attestation services positively related to the audit independence, namely:non-attestation services will not. reduce the audit independence, may have a positive impact.Since audit independence cannot be quantified, and it cannot adopt directly in the empirical study, so this paper apply the audit opinion as alternative variable of audit independence. The audit opinion is the auditor's audit result, it is the direct reaction of audit independence, so this paper set it as the dependent variable, due to the auditing opinions for virtual variable, so the non-standard audit opinion set to 1,standard audit opinion set to 0.The non-attestation services fees and the ratio of non-attestation services fees take the sum of non-attestation services fees and attestation services fees as independent variables, through the absolute index and relative index respectively to analysis the influence of non-attestation services on the audit independence. Among the control variables, this paper through the aspects such as audit opinion changes, the companies' scale, the operating performance and earnings management and accounting offices'scale, in order to decrease the other factors affect on the auditing opinions, thereby enhancing the reliability of the models.This paper chooses the data of the three years of 2006-2008 as the sample, out of the financial industry data, incomplete information disclosure data, and the data of not provide attestation services and non-attestation services by the same firms.This paper selects binomial Logistic regression model as the analysis model of the correction between non-attestation services and audit independence. Establish analysis model are as follows:LN(p/1-p)=β0+β1nafee+β2nafeeratio+β3lnasset+β4chanopin+β5recerio+β6nonc enrev+β7netrio+β8percf+β9top10+eAmong them, p is listed the probability of company to obtain non-standard audit opinions,1-p is listed the probability of company to obtain the standard audit opinions. The meaning of each variable is as follows:non-attestation services fees, the ratio of non-attestation service fees, the natural logarithm of the total assets of the listed companies, audit opinion changes, the ending inventory/final total assets, non-core business, net profit to total assets ratio, cash flow rate per share and accountants offices are or not top ten.Chapter 5:The results analysis of study of the correlation between non-attestation and audit independenceThis paper briefly introduces the disclosure of attestation services fees and non-attestation services fees, point out that the situation of disclosure in China is not very optimistic. Then do the descriptive statistics for sample, including descriptive statistics of industries, the descriptive statistics of audit opinions and the descriptive statistics of analysis of the sample. In the descriptive statistics of empirical analysis of the sample, this paper has used Kolmogorov-Smirnov test, non-parameter test and T-test, through the test to the sample the author preliminary gets the conclusion that the influence of non-attestation services fees and the ratio on the audit opinion is not significant. Then, this paper analyzes the reliability of the model through multiple linear.In the regression analysis, this paper analyzes the rationality of the model, goodness-of-fit analysis and victimized matrix, analysis, and gets that the model is credibility. The regression results concluded:non-attestation services positively relate to the auditing opinions, but not through the significant test, this explains that non-attestation services won't harm the audit independence,and this is the same with the hypothesis. Other control variables'regression results are in the gross consistent with the predict, of which the asset scale, total assets net-profit margins and audit opinion changes in the level of 5% significant, in the ratio of ending inventory to final total assets and non-core profit in the level of 10% significant. Chapter 6:The policy suggestions of development of non-attestation servicesIn this chapter, this paper introduces the development status of non-attestation services at home and abroad, and through comparison interprets the necessity, the existing problems and suggestions. Policy advice mainly include:(1)standardize the disclosure of attestation services fees and non-attestation services fees;(2)with information disclosure as the premise, to treat the non-attestation services dialectically;(3) strengthen the self-discipline of certified public accountants;(4) strengthen the non-attestation services market role of the government and industry organizations;(5) strengthen supervision and proper intervention to non-attestation services.This research contributions include:(1)make a further definition of non-audit services and non-attestation services, and the research scope is fixed on non-attestation services;(2) this paper selects the recent three years'data, research the development of non-attestation services in our country recently on the influence of audit independence, timeliness;(3) based on our audit market, through the combination of theoretical and empirical verify the feasibility of developing the non-attestation services in China now, and combines the development situation at home and abroad, propose policy suggestions for the development of non-attestation services.The limitations of this paper mainly are:(1) for the limited information disclosure, the sample is limited, and may have missed something happened to the non-attestation services but not disclose the company, which may lead to the results have certain error;(2)for the limitation of the non-attestation services,we cannot subdivide the items of non-attestation services to do the further research;(3) due to some factors of information, unavoidably omissions the potential factors which may exist and are not identified, to lead to not research for these factors.