The Research On Earnings Quality Based On Auditor Changes

In 1980 s, a few enterprises began to set "investment funds" to the public or internal staff, which opened the prelude of China’s capital market. In 90 s, Shanghai, Shenzhen two big security trading markets located in Shanghai, Shenzhen were established, marking China’s capital market into the stage of steady development. Following the pace of the market, the securities regulatory departments, securities service agencies have been set up. The accounting firm official emerged with the growth of China’s capital market as a bridge connecting the financial reports of listed companies and the public by bearing the heavy responsibility for auditing. Whether the accounting firms are able to provide auditing services with high quality becomes the base of further development. In terms of two decisive factors of audit quality, the independence and professional competence have always been the focus of scholars from many aspects and has always been attracting attention from parties of capital market. Independence determines whether certified accountants of accounting firms can avoid leaning to either side in the performance of supervision, inspection when they provide audit reports; professional competence is the capability of CPA in identifying risks in materials and to put forward the related audit reports.Although the establishment of capital market of our country economy has contributed greatly to the development of finance, the development of capital market is full of setbacks and frustrations. Listed companies, having been the focus with most attention in the capital market, will always produce a series of scandals such as the early "QiongMinYuan", "YinGuangXia" incident to the recent "WanFuShengKe", "LvDi" fraud case. All of those have an impact on the development of capital market. Accounting firms have also been criticized by investors due to the audit work.In recent years, the change of accounting firms in China matters is quite often. The change of accounting firms has also attracted great attention from the circles of theory and practice. Plenty of scholars have achieved extensive research from the change of the accounting firms, the reasons of change and its reasons on the change. Practitioners, the CSRC has announced specific regulations on the tenure of audit firms and CPA requiring listed companies timely to disclose related information when accounting firm changes. Because of this, from the perspective of changes of audit firms, this paper deeply continues the study of changes of audit firms on the quality of earnings from different level.First of all, this paper elaborates the change of audit firms and the change of audit firms Caused by Certified Public Accountant flowing,and the change of audit firms Caused by punish. through signal theory and herding effect in the theory part. And then deep-seated problems of three types of auditor changes have been explored. Based on this, this paper puts forward the research hypothesis. Secondly, this paper uses the data of 2011-- 2013 in Shanghai and Shenzhen Main Board of listed companies adopting empirical research methods respectively to verify relevant hypothesis. The results show that, in the overall study of the change of accounting firm on the earnings quality influence, change of the accounting firms have a negative effect on earnings quality. earnings quality of the change of audit firms Caused by Certified Public Accountant flowing is higher than Changes of other types of accounting firms.When examine the impact of punishment on accounting firms on the influence of earnings quality, accounting firms without punishment have a better earning quality than ones with a punishment. Finally, based on the previous research results, this paper made a summary.