A Study On Correlation Between Accounting Firm With Listed Company Audit Qualifications Industry Specialization And Audit Quality

Audit quality is not only related to the development prospects of accounting firm,but also has very important significance for promoting the development of the capitalmarket. In recent years, the occurrence in a series of audit failure cases of auditquality had become an increasing concern of the theorists and practitioners. How toimprove audit quality is increasingly becoming a hot research topic of the currentaudit areas. Audit quality depends on independence and professional competence ofthe accounting firm. As an important component of professional competence, theaccounting firm industry specialization plays an important role in improving thequality of audit services, many foreign literature have reached similar results, in thebackground of immature capital markets in China, whether the accounting firmindustry specialization is helpful to improve the quality of our audit.The Ministry of Finance issued the opinions on promoting the accounting firm tobecome bigger and stronger on May26,2007, and pointed out that the firm shouldprovide the corresponding professional service to have large-scale development,committing to become bigger and stronger, move towards the international. The scaleis the foundation, industry specialization is the core, and internationalization is thebenchmark. The CICPA issued "Chinese certified public accountants auditingstandards" in November1,2010,formally implemented in January1,2012, andimplemented the concept of risk-oriented audit to the rule of the system fullythoroughly, requiring the accounting firm put understanding the auditee and itsenvironment as the first step in the implementation of audit procedures. In this context,this paper selects A-share market listed companies as samples from2010to2012,using the method of multiple linear regressions, make a research on correlation of theaccounting firm with listed company audit qualifications industry specialization andaudit quality.Through extensive reading and summarizes related literature at home and abroad,combined with the competitive advantage theory, principal-agent theory andinformation asymmetry theory, put forward the following assumptions:(1) for theaccounting firms, industry specialization and audit quality are related;(2) comparedwith smaller accounting firms, industry specialization and audit quality showed more significant positive correlation in large-scale accounting firms. Then through thedescriptive statistics analysis, correlation test and multiple linear regression analysis,the above assumptions are verified one by one, and concluded the following researchproposal:(1)guiding and expanding the spontaneous demand for high quality auditservice in the capital market;(2)improving legal laws and regulations, and strengthensupervision and penalties;(3)the accounting firms should pay more attention to thedevelopment of the industry specialization;(4)encouraging the development of theindustry specialization in smaller accounting firms.The innovation of are that the one is to expand the meaning of accounting firmsindustry specialization, defining it from the accounting firms to the whole industrydevelopment; The second is the former related scholars usually adopt manipulabilityaccrued profit (DA) as alternative measures of audit quality, but this paper based onthe audit fee as audit quality alternative measure for research.