The Research On The Influence Of Different Auditrotation Modes On Audit Quality

In recent years,the listed company's financial fraud cases in the world happens constantly,investors have been scepticalabout credit of the securities market,a succession of audit failure cases not only make CPA independence and impartiality very questionable,but also put audit market into the confidential crisis.In order to improve the independence of audit firms to ensure higher quality of financial information,and strengthen the auditing profession credit and carrying forward,the mandatory rotation has been adopted by various countries.China also early began to implement mandatory CPA rotation system in 2004.However,the scholars haven't reaching agreement to the following questions:the effect of the implementation of mandatory rotation system,what the system can do tosolve the phenomenon of fraud,and forced rotation range should cover the accounting firm or not.Therefore,proving that the CPA mandatory implementation of the rotation system is able to improve audit quality,or looking for other possible audit rotation mode seems greatly significant.This paper studies on the different ways of audit rotation on audit quality,after reading and summarizing the related literature based on.First of all,explain the auditing rent-seeking theory,commissioned agent theory of analysis the importance of audit rotation on audit quality influence,then explain the concept of audit quality,audit quality instead of index concept.This paper argues that when combined with the previous research and the actual situation in our country,using discretionary accruals absolute value earnings management level instead of audit quality will be more accurate.The paper selects the 2013 to 2014 Shanghai A-share listed companies as the initial sample,control the rate of assets and liabilities and other variables,from the mandatory rotation of certified public accountants,voluntary rotation.The empirical studies concentrates on the impact of three rotation patterns on the audit quality:Mandatory rotation of CPA,voluntary rotation of CPA andvoluntary rotation of accounting firms.The results of the study indicated that:(1)There is no connection between the registered accountants voluntary rotation and the level of earnings management,;mandatory CPA rotation,the firm free rotation and levels of earnings management is related,playing a positive role in the improvement of audit quality.(2)the correlation with asset liability ratio,the level of earnings management,and positively related to the two degree is strong,audit quality is low;and the growth of listing Corporation,and the level of earnings management is positively correlated,the relationship,the stronger the degree,audit quality is low;the relationship between listing Corporation size and earnings management level the reverse relationship,the bigger,the audit quality is higher;and the positive relationship between the level of earnings management is obviouslyrelated to audit opinion,when the listing Corporation is non-standard audit opinions,audit quality is relatively poor;whether the listing Corporation losses,was issued,non standard auditing opinion and earnings management level,there is no direct influence on audit quality.Based on the above results,this paper puts forward some relevant policy suggestions:improve the governance structure of listed companies,and control listed company's information disclosure more strictly;Make reasonable rotation period of the firm;combine rotation and audit mandatory rotation together.