Research On The Influence Of Auditor Switching On Audit Quality Based On Media Supervision

Independent audit can act as an external governance mechanism,which plays an important role in ensuring the quality of accounting information and protecting the interests of the investors,etc. Audit qual ity can not only affect auditors’ reputation cost and their benefits,but also make a difference in other market participants in the decision-making behavior. In recent years,the media disclosed a series of scandals of accounting fraud and audit failure,which caused the extensive concern in academic and practice circles,and the role of media in corporate governance is widely recognized. Therefore, can media supervision affect audit quality? Meanwhile,audit switching and its consequence have been a major issue in the field of financial research both at home and abroad,but regulatory measures have been focused on the law and accounting system, ignoring the power of the effective governance of media supervision. In terms of the external governance, do media supervision have a positive influence on the audit quality of auditor switching? Researching the questions above, It can not only broaden the understanding of the influence factors on audit quality and the influential research of the governance role of media, but also provide constructive guidance in strengthening the supervision of news media on the self-discipline behavior of auditor switching.So based on audit contract theory and signaling theory, and combing them with “Agenda-setting” theory of Journalism, “Priming Effect” and “Frame” theory of Psychology. Using the sample of Chinese A—share listed companies from 2008 to 2014, this paper investigates the mechanism of media supervision on audit quality from the perspectives of negative press coverage and the environment of media supervision,and the effect of media supervision on the audit quality of audit switching measured by discretionary accrual. It reveals that both the level negative media coverge on listed companies and the environment of media supervision show a positive correlation with audit quality, and under the high environment of media supervision, negative media coverage has a stronger positive impact on audit quality than in the low er environment of media supervision. To study further, auditor switching has a negative effect on audit quality; However, the priming effect and frame setting of media supervision have an obvious positive impact on audit quality after auditor switching,and this positive role tends to be more significant on the audit quality after auditor upgrading and switching contrasted to level switching and downgrade switching.Based on the conclusions above, this paper finally puts forward suggestions strengthening the supervision of news media on information disclosure of listed companies, improving the supervision of news media on the self-discipline behavior of auditor switching, promoting the integrated development of the news media industry and the CPA profession,and improving the government’s supervision and regulation on the news media industry, etc.