The Effect Of Real Earnings Management On Audit Fees In Chinese Listed Companies

Audit fees will affect the attitude of the CPA and their independence, thereby will affect the quality of the audit. To a certain extent,audit fees specification reflects the status of China’s audit market, so it is necessary to study the factors that influence the cost of the audit and study how to regulate the audit fees. With more and more earnings management,it causes serious effects on the stock market.And some scholars have begun to study the impact of earnings management on audit fees. There is some research on the relationship of earnings management and audit fees,but what they care about is accrued earnings management,but the true is that there are more real earnings management than accrued earnings management.So there is an urgent need to study the impact of real earnings management on audit fees. In this paper, i focus on the problem of the current stock market, studying the impact of real earnings Management on audit fees.To further,i will study is there any difference of the effect of real earnings management on audit fees between "BIG4" and "non BIG4" certified public accountants.Based on the data of Chinese listed companies from 2011 to 2014, there will be an empirical study of the impact of real earnings management on audit fees in this paper.Based on previous research, we construct two multiple regression model, a model will be uesed to study of the impact of real earnings management on audit fees,another will be used to study is there any difference of the effect of real earnings management on audit fees between "BIG4" and "non BIG4" certified public accountants. Through theoretical analysis and empirical test, i get the following conclusions:(1) the listed company’s earnings management significantly affect the audit fee, in the case of controlling for other factors. The higher real earnings management of listed companies, more audit fees the certified public accountants would charge. (2)There are some difference of the effect of real earnings management on audit fees between "BIG4" and "non BIG4",the "BIG4" certified public accountants is more significant.This paper focuses on " the effect of real earnings management on audit fees ".It can enrich the literature of real earnings management, the literature of the factors that affect audit fees, the literature of the effect that the earnings management on audit fees.To some extent, It will be helpful to further standardize the market of audit fees strengthening oversight of the auditing profession and also lay the theoretical foundation for the governance governanceing the real earnings management. However, due to the minor deficiencies of the chosen variables the sample-period,the samples,or the econometric model, the result of the empirical of this paper may be affected. The article also did not find the method that certified public accountants can use to deal with the real earnings management problems, this will be a very worthwhile direction for future research.