Investigation Of Relationship Between Audit Tenure And Audit Quality

In the Western developed securities market, several years ago some experts and scholars has started the research on the relationship between audit tenure and audit quality, and formed their own views. Some believed that is proportional to the relationship, and some believed that was inverse relationship, others considered it was non-linear relationship. With the enactment of famous Sarbanes-Oxley Act, the relationship between audit tenure and audit quality has become a hot issue of academic interest, and so far there is no single conclusion of it.This paper focuses on the relationship between audit tenure and audit quality to research. Based on the research results at home and abroad, we gives the measure of the quality audit, and this is the basic theory of the relationship as below. After further analysis of the status of China’s audit market, and analysis the causes of this situation from China’s economic environment and the commission on behalf of the theoretical. In theory, the study draws on economics, game theory involves the idea of the quality of audit tenure and audit aspects of the relationship between two people of the game analysis. In the previous theoretical Groundwork, we selected the type of audit opinion as a measure of audit quality, and select the audit period、audit tenure squared、firm size、the logarithm of total assets、 listed the number of years、asset-liability ratio、total return on assets and return on net assets and liabilities as a ratio of audit tenure and audit opinion type of control variables, and use the database of listed companies in China to selected sample of140to do empirical studies. Through described samples and statistical regression analysis, we find that with the growth of audit tenure, the quality audit first becomes high and then low. Finally, according to the above conclusions and China’s actual economic environment, we make recommendations to improve the quality of accounting information of listed companies, to maximize the protection of investors and regulate China’s securities market order.