Research On Relationship Of Audit Tenure、 Executives Associated With The Accounting Firm And Audit Quality

In October,2003, China’s Securities Regulatory Commission and Ministry of Financejointly issued "the requirements of the regular rotation of auditors signing on the securitiesand futures"(hereinafter referred to as the "Requirements"). It forced the securities marketsaudit business signing auditor to conduct regular rotation and stipulated, in general, that thesigned auditor might not provide a continuous audit services to the same customer for morethan five years. This article will explore audit relationship between tenure and audit qualityafter the following "Requirements".In recent years, people began to focus on the relationship between executives and theCPA audit quality, which is mainly due to Enron and other large corporate financialscandals. Because of the existence of relevant work experience of company executivesaccounting firm, the CEO of the company will use some of the previous audit knowledgeand experience to whitewash the financial statements during the process of preparing thefinancial statements of the Company. Therefore, this paper introduces a new perspective ofthe CPA association executives and focuses the study of the relationship between theexecutives and the CPA audit quality.In this paper, we chooses the A-share market of2020in Shanghai and Shenzhen listedcompanies as samples after the implementation of "Requirements", which exclude theexistence of financial firms and some extreme values listed companies. Through empiricalanalysis method to analyze the relationship between audit tenure and audit quality, weanalyze the association of executives and accounting firms audit quality. By correlationanalysis and regression analysis, we draw the following conclusions: After the"Requirements" promulgated, there was no significant impact on audit quality audit tenure,indicating the effectiveness of "Requirements" promulgated. In terms of the association ofexecutives and the accounting firm, senior CPA audit quality showed a negativecorrelation. Namely, if the company executives have relevant work experience, they will often use their own knowledge and experience to audit and to whitewash financialstatements, thus the lower audit quality.