The Research On The Effect Of Corporate Risk On Audit Quality Based On The Macroeconomic Fluctuation

As oversight mechanism of capital market, auditing has great significance in ensuring the quality of accounting information and orderly operation of the capital market. With a series of auditing failures occurring in recent years, audit quality has aroused common concern of various regulatory authorities and academia. The object of auditing is the listed company's financial reporting, and the audit quality is affected by the quality of financial reporting. When the corporate risk changes, the managers ' motivation of whitewashing financial reporting strengthens, thereby affecting audit quality. According to previous studies, our macroeconomic fluctuation occurred in recent years, and had impact on micro-subject. This impact may change the relationship between the corporate risk and audit quality, and the change s between accounting firms of different sizes may be different.Based on the above problems, this paper focused on the impact of the corporat e risk of audit quality, the impact of macroeconomic fluctuation on the corporate risk of audit quality and the differences of the impact of macroeconomic fluctuation on the corporate risk of audit quality in accounting firms of different sizes. Firstly, w e proposed analytical framework of three questions based on the theory of agency by agreement, prospect theory, reputation theory and deep pocket theory. Secondly, we selected all A-share listed companies from 2004 to 2013 as samples of data, established Logistic and Multiple Linear Regression Model and implemented the empirical tests of the three questions after controlling for accounting firms self-selection bias. The results showed that:(1) the higher the corporate risk, the higher the audit quality;(2) compared with macroeconomic departure, the positive correlation between the corporate risk and the audit quality significantly reduced in macroeconomic downside, that is to say, the sensitivity of auditors of corporate risk reduced in macroeconomic downside;(3)compared with the “Non-big Four”, the negative regulation that macroeconomic departure legs on the correlation between the corporate risk and the audit quality is more significant in the “Big Four”, which to a certain extent, shows that the auditing service quality of the “Big Four” is not above even below the “Non-big Four 's”.Finally, we proposed several policy recommendations to improve audit quality from the audited entity, accounting firms and governments of the three angles: expand the scale of the board of directors appropriately; rationalize the development of the accounting firms' size; strengthen auditor professional ethics to reduce the auditors ' negative behaviors; improve the legal environment; strengthen oversight function of government and promote the construction of the laws and regulations and improve the legal environment.