Research On The Impact Of Auditor Size On Audit Quality

The system of equity issuance alter the audit system to the registration system in 2015, listed or delisted of the company are all diceded by the market. Market need investors to provide high quality accounting information, to make an accurate decision-making of the above items. The role of the audit is to ensure that the listed company to provide high quality accounting information. Therefore, audit has played a more important role under the background of registration system. In order to ensure that the listed company of our capital market can obtain high quality audit services, government departments in China launched a series of policies to encourage local accounting auditor size expansion. Theorists think that large accounting auditor in all aspects to invest more funds, have more customers and has higher independence relative to a particular customer, so large auditors can provide higher quality audit service, however, the results of empirical study is not consistent. In recent years, great changes have happened in law environment of our country, auditors began to face huge legal risk, and large auditors face greater litigation risk compensation because of its "deep pocket" responsibility. Whether large auditors should pay more attention to improve the quality of auditing services, are in urgent for validation.This paper under the guidance of the theory analysis, combines with the current legal environment in our country, uses handling accrued profit as proxy variable of audit quality, deal with 2007-2013 a-share listed companies as research samples to do regression analysis. The empirical evidence shows that: Large-size auditor provide audit service quality is higher than the small auditor; International biggest four auditor’s audit quality and the domestic large-size auditors, there is no significant difference. This from a certain extent indicates that, with the advancement of domestic auditors’ bigger and stronger strategy, the continuous improvement of the domestic legal environment, the domestic large auditor and international "big four" face the same operating environment, their ability to provide services, independence with customers almost have no differences.The contribution of this paper is to put the auditor in more detailed classification according to the size, according to the difference of large auditors and small auditor’s audit quality inspect if there is a difference between big international big four and domestic large-size auditor’s audit quality. The article also further improve the research methods of ancestor, Heckman two-stage regression method is used for controlling the endogeneity problem of the auditor. Limitations of this article is difficult to measure of the law environment, the law environment factor is not considered into the model, and how much degree the handling accrued profits represents the audit quality, it need to be considered in subsequent research.