Empirical Study Of Independent Audit Quality Based On Audit Risk Perspective

In the 21st century, a series of auditing scandal triggered a global audit credit crisis, whether the quality of the auditing reports issued by certified public accountants, usually flaunted to be independent as whose soul, is trustworthy, has been a hot topic in people Audit quality. As the key part of auditing profession, if there is no guarantee for the audit quality, it will surely lose its value of existence. Although the research of audit quality has been conducting for many years, the definition of audit quality is still not unified. Based on Audit quality framework that released by IAASB in 2014, this paper distinguished audit quality into the single business audit quality, the firm’s audit quality and the industry-wide audit quality, it also combined qualitative and quantitative method, quoted nearly 10 years’ data of China’s listed company, and for each level, the measurement of audit quality, the trend of distribution of audit quality and the influence factors of audit quality is studied. In many proxies for audit quality, empirical data showed that the consistency of audit risk and the audit opinion given by the auditor can serve as feasible quantitative substitute to audit quality. In terms of individual audit report, the quality of the audit report can reduce the analysts’ forecast deviation effectively, it also verified the feasibility of the use of the ratio of audit opinion and material misstatement as a substitute for individual business audit quality in this article; under the influence of factors like corporate governance structure, the higher the financial stress or internal control defects, the lower the firm’s audit quality. In terms of the accounting firm, the bigger the firm is, the more stable the audit quality is, but the indicators of firm level usually do not associated with individual business audit quality, the overall audit quality or its ranking cannot reduce the analysts’ forecast of the rate for a single company; among the factors that affect firm’s audit quality, the closer the firm to the top, the higher the firm’s audit quality is; the more staffs the firm own, the higher the firm’s audit quality is; besides, the more the business, on average, that undertaken by certified public accountants of the listed company, the higher the audit quality is; the lower the economic dependence of the individual business of a the firm, the higher its audit quality is. In terms of the overall industry audit quality, the audit quality shows a tendency of overall increasing, and the audit mode may affect audit quality. Hence, we recommend that the listed company itself shall issue a series of sound financial policies, set up a sound system of corporate governance, perfect the internal control system, abide by the relevant accounting laws and regulations strictly, and always disclose the real fair financial statements; when auditing individual business, the firm shall introduce modern lead audit risk model, stick to the risk oriented pattern, pay the closest attention to the place with the greatest risk in the enterprise financial statements, and always remember strengthening the auditors’ business ability, focus on firm’s culture and auditors moral quality cultivation; the industry regulations should disclose those audit quality testing data regularly, and further perfecting the relevant laws and regulations, developing new audit technology, thus improve the quality of audit of our country.