An Empirical Study On The Relationship Between Non-audit Services And Audit Quality

For a long time,the relationship between non-audit services and audit quality seem to be vague.Whether there is a significant relationship between the two,which has led to extensive discussion between the audit community.From the Enran fraud case,financial fraud casesare common around the world.It leads to a very serious crisis of confidence about the independence of certified public accountants.And the corresponding non-audit services have been made.Many countries began to prohibit the CPA to provide audited customers with non-audit services.This wave is sweeping the whole world.Therefore,it is obviously important to study the relationship of non-audit services and quality of the audit.How can the development of non-audit services be developed?Whether the development of non-audit services can lead to good results in the audit quality of accounting firms?Should we prohibit China's accounting firms from providing non-audit services to audited clients like other country,or seek suitable solution for China's current audit environment development path after rational analysis China's audit market.If we can figure out a win-win approach,that would be a very important.At present,most of the research on the relationship between non-audit service and audit quality in China are limited to the study of the impact of non-audit fees on the independence of CPAs.This paper attempts to replace the non-audit services by the ratio of non-audit fees and non-audit expenses(including audit fees and non-audit fees).We also use the earnings management quality of the enterprises to replaces the audit quality.Our data source is A-sharecompanies' data during 2011-2015.Through the correlation coefficient analysis,univariate regression and group regression,this paper explores the relationship between non-audit services and audit quality.Finally,after empirical analysis,the results show that there is a negative correlation between non-audit fees and the ratio of non-audit fees,for both the top ten accounting firms and the non-top ten accounting firms.Then,with the increasing proportion of non-audit services provided by accounting firms in recent years,the non-audit services have a greater positive impact on the quality of audits,and there is a significant positive correlation between non-audit services and audit quality relationship.