Effect Of Board Governance Characteristics On Audit Quality

This paper summarizes the previous research which refer the impact relationships between the board characteristics and audit quality on the basis of literature review.Then the paper gives an overview of the concept of the board governance characteristics and audit quality.This paper put forward the hypothesis on the basis of literature review and analysis of the relationship between the board governance characteristics and audit quality:the board quality and the audit quality have an significant positive correlation.Furthermore,this paper divide the board governance into four characteristics:board size,board independence,board diligent and board specialty.And then this paper put forward the following hypothesis:Hl:board size has an positive relationship on the audit quality.H2:there is significantly positive correlation between board independence and audit quality.H3:the high board diligence,the high audit quality;H4:board specialty has an significantly positive correlation on the audit quality.And this paper selects the member of board,the percent of the independent board,the frequency of board meetings and the numbers of the committees under the board as the substitute variable for the board’s four characteristics.Then this paper chooses the listed companies which list on bourses of Shanghai and ShenZhen as the research sample,and replace audit quality with the CPA firms’size.It analyzes the impact of board governance characteristics on the audit quality through multiple linear regression.Further more,this paper makes a solidity test for audit quality and the board specialty.And the conclusions are in line with the former:the impact of the board size and the board independence on audit quality are not significant;the board diligence and the board specialty have an significant correlation on audit quality.And this paper also gives the reasons why the hypothesis H1 and H2 are not significant.At the end of the paper, it provides the suggestions how to improve the quality of board.