The Empirical Study On Corporate Governance, Audit Market And Audit Quality

The CPA audit is one of the external supervise system. Audit quality directly relates to the credibility and reliability of company's financial statement, and relates to the expected user's degree of trust of company reports, determines the degree of protection of stakeholders. Audit quality and corporation internal governance supplement each other, promote and supervise each other. It is one of the indispensable important parts of corporate governance.Because of the imperfections in China's capital market, the unreasonable design of listed company governance structure, lacking of corresponding balance mechanism, the managers absolutely have the advantage of information. They can control profits and Window-dressing statements, especially when the company is in the financial and operational difficulties, the earnings management control is more apparent. In such cases, audit quality is affected by the corporate governance. Good corporate governance can provide good external conditions for audit quality; it can reduce the degree of the managers' intervention for certified public accountants audit. The imperfections of Audit market cause the audit opinion-buying to happen from time to tome. Whether larger firms have more accountants'who with stronger professional skills, can maintain their independence and professional competence, can have the competence to project the interest of the investors in a certain extent, it need further studies.Therefore, my thesis is attempts to comprehensive research the affected factors of the audit quality from the two-sides:the corporate governance and the audit market research.First, this paper analyzes the affect of audit quality from the corporate governance and audit market theoretically. Secondly, I select the loss listed companies in 2008-2009 as the sample, select the audit opinion as audit quality alternative variable, respectively have the empirical analysis of corporate governance for audit quality, audit market for audit quality, and then have the empirical research of the two sides——corporate governance and audit market. I have chosen the factors of corporate governance such as the first shareholder, ownership restriction, the rate of independent directors, the background of a corporation, if the chairman and general manager is the same person. I have chosen the factors of the audit market such as Audit fee, firm size, economic dependence, industry expertise, entry and exit barriers to auditThe empirical research results show that, if consider the characteristics of corporate governance and audit market, there is only the index-the chairman and general manager is the same person, the share ratio of the. largest shareholder, and the entry and exit barriers of audit market are related with the audit quality.