Empirical Research Of Inlfuence On Non-audit Service And Audit Quality

In recent years, along with the Enron event erupted, CPA’s auditingindependence has been questioned, which results in the birth of the accountingsupervision and regulation, our country also pays attention to the development of CPAprofession in the new areas of service, especially to the non-audit service. Such as the2001 Chinese Securities Regulatory Commission published the regulation on publicissuance of securities company information disclosure of N0.6, which requested thatlisted corporations should disclose the audit fees and other fees except for financialauditing fees in the annual report. However, in order to meet the needs of the presentstage of our country’s rapid economic development and the transformation ofeconomy, and meet the needs of corporations to improve their operations andaccounting firms to broaden the scope of business fields, the office of the StateCouncil transmitted several opinions of the Ministry of Finance on accelerating thedevelopment of Chinese CPA industry. To carry out the file, in 2010 February theCPA Association released and printed the catalog of profession guidance of certifiedpublic accountant, which advocated accounting firms to be bigger and stronger andvigorously develop new service items.The domestic researches almost focus on the effect of non-audit services itselfon the degree of earning management, and their research objectives only on theaccounting firms that measured in accordance with their revenue amount standards.But this paper utilizes whether CPA issues unqualified audit opinion as thesubstitution variables to describe auditor’s independence and audit quality, andmeanwhile studies the accounting firms that measured in accordance with theirclients’amount standards. The samples in the study cover from 2009 to 2010, inwhich listed companies existed and disclosed non-audit service fees in the Shanghaiand Shenzhen’s main board. I observed the relationship among absolute number and relative number of non-audit service fees and audit opinions, and further discussedunder the presence of significant non-audit fees on the importance of clients theory,how audit quality reflected, which intended to inspect whether CPA compromise theirindependence or not more intuitively and completely.This paper applied empirical analysis method by Logistic regression, and theregression results showed: firstly, in the other conditions remain unchanged, theabsolute number of non-audit services fees and the possibilities of auditors issuedunqualified audit opinion are positively related, and reached the significant level,which approved that the more non-audit service fees, the more likely CPA wouldissue unqualified audit opinion; secondly, non-audit service fees rate and thepossibility of auditors issued unqualified audit opinion also presented significant andpositive correlation, which approve the larger non-audit service fees accounted for thetotal service fees, the more likely CPA would issue unqualified audit opinion; finally,in the test on the relationship between significant non-audit fees rate and thepossibility of auditors issued unqualified audit opinion, I found the more significantnon-audit services, the more likely CPA would issue unqualified audit opinion, butthe results are not significant. In that, although the fast increased non-audit serviceenriched and developed CPA service contents and their profits room, also broughtfavorable support for the efficiency of corporations operation and management,however, but the premise is when CPAs provided non-audit services from the sameaccounting firms that meanwhile provided audit services must be able to guaranteenot to tolerate clients’ financial frauds and material misstatements, also not tocollude in the false behavior of clients. Although the raise of non-audit service feeswould increase the possibility of certified public accountants issuing unqualified auditopinion, nevertheless, we could not say where there is non-audit services to thecompanies, where audit opinions are false, the empirical study results only showedone kind of tendency, which aimed to remind information users to pay more attentionto some kind of corporations that purchased non-audit services at the same time, andthey need to consider whether thereout the condition is implicit that auditors havecompromised their independence. In addition, based on the non-audit service feesfrom important clients do not produce adverse effects on audit opinions and audit quality apparently, and in order to meet the needs of development and transition forour economy, companies and the accounting firms, we do need to advocate theaccounting firms to develop greatly and strongly and promote new servicesvigorously. Whereas our country should not copy the supervision norms of Europeand the United States blindly, we should explore the non-audit services system onourselves in accordance with our national condition, under the guidance of assuringaudit quality at the same time make contribution to the transition of our economy andcompanies management.