Research On The Effect Of Internal Audit On External Audit Quality

As the phenomenon of a variety financial fraud appearing,the public suspect the effectof audit and pay close attention to audit quality.There are so many factors,what can impactthe external audit quality.Therefore,scholars take research on accounting firm and theauditees.Internal audit is the most important part of corporate governance,what hasimportant influence on external audit quality.At the same times,as the Chinese certifiedpublic accountants auditing standards No.1411,it aims to encourage the use of externalaudit on internal audit work.Although studying whether the internal audit work hasinfluence on external audit quality and how its influence degree,there has importantinfluence on improving the quality of external audit and promoting internal audit andexternal audit communication and collaboration.This paper takes a research method combining normative research and empiricalanalysis.It state the internal audit related theory and audit quality related theory.Based onthe theory of fiduciary duty and asymmetric information theory,it,by three aspects thatexternal audit make ues of the internal audit’s achievement,and the relationship betweenrisk management or internal control and external audit,and The influence of internalauditing based on corporate governance to external audit,analyzes the influence of internalaudit to external audit quality.This paper,based on332samples from Shenzhen and Shanghai motherboards listedcompanies of A-share,establishes the regression model to take the empirical analysisbetween internal audit quality and external audit quality.The empirical results showthat,there is a significant negative relationship between internal audit quality and theexternal audit quality.In other words,the higher the quality of the internal audit,the higherthe quality of the external audit quality.Because the internal audit provides a great help forthe external audit.However,they have a less relatation,which influement that internal auditto external audit quality has not been brought into full play and overall strength of internalauditing has to be raised.At the same time,the paper also establishes models for each partof the four aspects of internal audit quality to research the influence that internal audit toexternal audit quality.The empirical results show that,Internal audit scale and the scope ofwork have great influment to external audit quality. Finally,according to the results of theoretical analysis and empirical research,thepaper,for the internal audit status in our country,put forward to several suggestions thatenhancing the level of internal audit and strengthening the cooperation of internal audit.Atthe last,it points out the limitation of the article and looks to the future.