Exploration Of Relationship Between Auditor Industry Expertise And Earnings Management

Earnings management usually refers to the enterprise’s management in order to whitewash financial report, and processment of its built, the structure of some enterprise transaction conducted by the accounting method choice behavior, in order to statement users using accounting data in the enterprise operating and financial performance of judgment, eventually the misleading. Earnings administrate fall into accrued earnings administrate and real earnings administrate.Accrued earnings administrate is company administrate layer of financial reports to on hold, use the selection of accounted norm and accounting system supply of space, through selection of accounted estimate change and modulation of the enterprise accounted regulations choose and other forms of surplus method. And real earnings management refers to the enterprise the management layer through accident or adopt structure trade plan adopted is not the best plan to adjust the economic activities of the surplus method, through the manipulation of the sales, production charge control way. In recent years, because of the accounting standard and accounting system in perfect, supervision in continuously strengthen and related party interests to strengthen understanding of the way to guard against, so the enterprise the management layer of the possibility of using accrued earnings management to reduce gradually, and real earnings management because of its model is diverse and very flexible and wrist latent reason more and more attention from the company management layer.Auditor industry specialty is refers to the higher market share in one or a few industries, reputable, has more excellent professionals and a complete set of professional knowledge of the accounting firm. In practice, an accounting firm in response to the audit object and the current situation of audit business has become increasingly complex, often through the development of certain industries and industry specialization operation; it is also the audit market development to certain stage will present a market signs. At present, there are still a large number of documents for certified public accountants industry expertise held positive study, this paper mainly discusses the problems and the literature in the following three aspects:(1) according to the discussion of certified public accountants industry expertise to measure;(2) for certified public accountants industry expertise and audit fees what involvement of exploration;(3) for registered public accountants industry expertise and comptoller quality has the probe about what to do. Since 1973,the AICPA has issued audit guidelines of special industries, continued the audit guidelines for special industries, and the audit mass control norm for assigned, growing, with industry expertise of registered public accountants, the clarify for the auditor industry specialty in our country has long been valued. Have the industry expertise of registered public accountants, however, whether the audit target of surplus management activities held efficacy convergence still needs further research.This article selects 2011—2013 A-share listed companies in our country as samples, by means of combining normative research and empirical research method, the registered public accountants industry expertise and the connection of the earnings management. Finally recommendations that:(1) Audit firm industry expertise and appears between accounting earnings management is clear negative relation. Because in specific industry established the audit market structure, accounting firms occupy the bigger market share, the industry of audit experience more rich, gradually built up a complete industry related knowledge system, it’s in the audit process with high sharpness and profound knowledge timely discover and inhibit the accrued surplus behavior of management, to increase the surplus quality. 2) Audit firm industry expertise and real earnings management is a negative relationship. Because if accounting firms have expertise in a certain industry, usually means that the characteristics of its production and operation of the industry, transaction process and the specific accounting policies have more fully grasp of knowledge, which helps to collect with relevant audit evidence, the ability of professional judgment improvement, and found that earnings management conduct, etc., thus increase the surplus quality. The specialization level of certified public accountants themselves through ascension, strengthen their industry requirements of audit skills, can in a certain extent can deeply understand the real situation of the auditors, its conduction and operation nature of an industry, program trading, and some special knowledge of accounting policy support, help, and in the audit work can have a high level of professional judgment ability, collect more robust evidence to achieve high quality audit in order to reduce audit risk, increase the surplus quality...