Study On The Correlation Between China’s Listing Corporation Executives Characteristics And Audit Fees

With Wanfu Biotechnology and other listing Corporation have exposed the financial fraud scandal, audit institutions are facing pressure from investors and regulators to grow with each passing day, it is very important to how to prevent audit risk. As a for-profit institutions, accounting firms and audit companies is a relationship of customers and merchants, and the accounting firm priority issue to consider is prudent to choose their clients. CPA audit fees as the main source of income, but also reflects the price of the service external audit. It is also mandatory disclosure of audit reports is an important part of increasing shareholder of financial information credibility. Abnormal fluctuations in audit fees also reflects problems of corporate governance, which shareholders also played a role in warning prompt. External audit oversight of the company, the financial report provides assurance services, the company responsible to shareholders, improve audit quality, but also an essential measure External Corporate Governance. Sound and effective corporate governance junction can greatly reduce audit risk, the audit in a mature market, the Certified Public Accountants in audit fees should not only consider the size of the company, the complexity of the economic business, financial condition, industry type these fundamental factors, but also consider audit risk. Studies have found that audit fees is mainly constituted by the inherent cost, risk premium and normal profit.Executives of listed companies as a "professional agent" directly executive corporate governance, because of gender, age, work experience learning these features will also affect the survival and development of enterprises. Perfect sound corporate governance mechanism, executives can conduct effective restraint, to reduce their own interests accounting control, increasing the feasibility of financial reporting. Top Management as an important measure to improve corporate governance, shareholders also resolved agency risk, an important means to improve the company’s operating performance and management efficiency. In reality, as the auditors undertake to reduce information risk and the insurer’s dual role. On the one hand, the auditors were hired to fair expression of the financial statements to confirm and troubleshooting whistleblowing, the financial statements in order to reduce errors and reduce implicit information asymmetry. On the other hand, with the principal and the agent hired auditors and audit fees due to give bear the corresponding audit risk, if the auditors are not aware of human negligence and fraud, the court ruling will provide appropriate compensation, in order to achieve the risk sharing. This is the West’s "deep pockets" theory. To avoid becoming a CPA firm dance event fraud exposure "guilt", and even more to strengthen the audit risk control. Audit risk by the inherent risk, control risk and detection risk components. In the same time of the audit risk, there is a negative correlation between detection risk and the inherent risks and control risks. Similarly speaking, when the higher inherent risk and control risk enterprises need to reduce detection risk, which will certainly increase the strength of CPA audit, raising the cost of the audit. With the increase of the intensity of the audit and audit costs, audit costs also increased. Thus, higher inherent risk and control risk will increase audit costs.In recent years, the research on audit fees influence factors of the articles are not uncommon, but the study of executives characteristics and audit fees rarely, mostly from executive characteristics of single factor or corporate governance and audit fee research, this paper to executive characteristics as starting point, using a combination of normative and empirical methods, from 2012 to 2014 Shanghai A-share 2568 sample data selected as the research object, has conducted the research to the correlation of executives of listed companies characteristics and audit fees.This paper is divided into five chapters:The first chapter is introduction. This paper describes the research background and significance, research ideas, research framework construction, points out the innovation of this paper.The second chapter is literature review. Review of executive characteristics, corporate governance and audit fees influence factors, to understand the current status of the research, this review, points out that the research of this revelationThe third chapter is the theoretical analysis and assumptions. This chapter of "executive characteristics" and "audit fees" two main concepts and theoretical analysis, elaborated the relevant theories. Including:principal-agent theory, higher order theory, audit contract theory and game theory, and puts forward the related hypothesis.The fourth chapter is the empirical research design. Illustrates the sources of data and how to select the sample, definition of variables. build executive characteristics and audit fees model. Through the empirical test of the model, and draw the conclusion This analysis and summary.The fifth chapter is conclusion and suggestion. The research results show that the executive compensation incentive does not play an effective role, the overall low pay level is the most important reason why the incentive effect can not be played; 2012-2014, approximately over 90% of companies have zero presence of executives holding phenomenon, its average only about 1%, the proportion is very low, the long-term incentive mechanism has not been given due attention; mostly listed companies are more willing to enable male managers, but empirical evidence that women managers can effectively reduce audit costs; executive educational background and audit fees showed a significant positive correlation; two jobs part-time executive and audit fees showed some positive relationship, chairman and general manager of two jobs concurrently chairman of the supervisory functions weaken, undermine its objectivity and impartiality, the impact of accounting information authenticity, reliability, increased audit fees from the side; and audit executives change there is no clear correlation between the cost of which may be due to executive changes are the result of internal and external governance, not just because of a performance reasons, there may be internal adjustment executives change jobs due to the change.The innovation of this thesis lies in:First, the innovation variables. Review the relevant literature, mostly single factor (senior executive compensation, executive stock ownership) in the relationship of executive characteristics on audit fees, the executives of inherent factors (age, gender and background) research very little. With this in mind, the correlation between the executive the inherent factors and audit fees were studied. Second, the innovation of research perspective. At present, most research on corporate governance and audit fees or correlation relationship between independent director and audit fees, and executives as the soul type of enterprise, only its research related to audit fees, it is thought that a correlation study, so the executive characteristics and audit fees.