Study On Auditor Switches Of Chinese Listed Companies

In recent years, stock exchanges are going to the downturn. And there are more and more listed companies changed their auditors. Especially with the exposure of momentous financial fraud cases, auditor switches draws unprecedented concern of society. Why did listed companies change their auditor? What is their purpose? And when they change their auditors, whether does the audit quality have significant difference between the predecessor and the successor?So based on aforesaid question, the paper chose the listed companies which changed their auditors in 2002 as the research samples, and then carried on the following studies. Firstly the paper investigated the status in quo of the auditor switches of Chinese listed companies, which was composed of the supervision of China's Securities Regulatory Commission (CSRC), the general view of auditor switches in past years and the auditor changing announcement and announcement actuality. Secondly, considering different factors that effected the auditor changes, the paper sampled the listed companies that changed their auditors in 2002 and went on an empirical analysis to find the chief reason by the Logistic model. Lastly, the paper used the preceding research for reference, established the Jones model and analyzed the effect of earning management to find the audit quality difference of auditor changing front and rear.Throughout the analysis, the paper drew the following conclusion:①The situation of auditor switches was still grave.②The announcement quality was not up to standard.③When the listed companies were in distress or got a non-standard auditing opinion or major shareholders were altered, they were inclined to change auditors. Among them the influence of financial affairs in distress to the auditor switches is the greatest.④After auditor changing the audit quality was still high and did not have difference between the predecessor and the successor.According the research conclusion, the paper brought forward some advice to China's Securities Regulatory Commission (CSRC), auditors and investors.①CSRC should establish perfect supervision system and aggregate the punishment.②The auditor should hold the independent, objective and just position.③Investors should vigilant to the listed companies which changed their auditors.