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The Impact Of Government Regulation On Audit Quality

Posted on:2020-04-07Degree:MasterType:Thesis
Country:ChinaCandidate:M X GaoFull Text:PDF
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The importance of information disclosure of listed companies to the capital market is self-evident.Accounting firm is an important mechanism to ensure the quality of information disclosure of listed companies.In the audit market,audit output is a special product.It is an information product designed to reduce information asymmetry.It is a digital product with no explicit characteristics.The quality measurement is more difficult and the consequences are more serious and indirect.In a sense,this particular product feature puts higher demands on market regulators.In recent years,the CSRC has paid more and more attention to the institutional restraint effect of the government regulation mechanism on suppressing information manipulation of listed companies,forcing audit firms to audit carefully,and improving audit quality.Since 2016,the CSRC has issued a notice to a number of accounting firms,such as Lianda and Ruihua,to suspend the new securities business and rectify within a time limit.While increasing the regulation of information disclosure quality of listed companies,it has also increased penalties for accounting firms that failed to provide audit reports due to low-quality audit reports.However,has the regulation of the securities market of the CSRC achieved its purpose and improved the audit quality of accounting firms? If government regulation does improve the quality of auditing,what kind of mechanism does this impact have? In order to better explore the above problems,this paper takes case analysis as the research method,and selects Ruihua accounting firm,which has been punished by the CSRC from 2016 to 2017,as the main body of the case.Firstly,it analyzes the process and problems of Ruihua's acceptance of punishment.It reveals the economic consequences of being punished for Ruihua.Secondly,from the degree of earnings management,the types of audit opinions,and the auditing fees,the changes in audit quality after the punishment are measured.Finally,in order to more accurately understand the impact mechanism of China's government regulation on the audit quality of accounting firms,this paper analyzes the factors affecting the quality of auditing,and constructs an audit quality analysis framework from the perspective of government regulation.Further from earnings management and internal control perspective of listed companies and risk management and audit investment perspective of accounting firm,analyze the impact of the CSRC accounting department on audit quality,to understand the internal mechanism of the government regulation of the CSRC,in order to propose more targeted Policy recommendations.Through the study of the case,this paper concludes that the audit quality of Ruihua has been significantly improved after the punishment of the CSRC,which confirms that the government regulation of the CSRC has produced certain effects in the punishment of accounting firms and the improvement of audit quality.This effect is generated by forcing listed companies to converge on earnings manipulation behaviors and improve internal control quality,and urge accounting firms to strengthen risk management and increase audit input.And the following suggestions are put forward: Firstly,in the perspective of government regulation,it is necessary to strengthen regulation,and strengthen the continuous regulation and inspection of the rectification of the firm after the penalty,and at the same time,it should make full use of the different roles of the various supervisors to improve the efficiency of regulation.Secondly,for the accounting firm itself,it is necessary to improve the audit quality control system of the firm by strengthening the integrated management of the general branch,improving the independence of employees,and maintaining the stability of internal talents.
Keywords/Search Tags:Government regulation, Accounting firm, Audit quality, Influence factor
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