The Study On AH Cross-Listing To Spillover Effect Of Audit Quality In A Share Capital Market

With the convergence of Chinese accounting standards and international accounting standards,the problems of cost increases and resource wastes among cross-listed companies caused by the double audit system are becoming significantly prominent.In 2010,the departments such as Ministry of Finance,Securities Regulatory Commission as well as the relevant departments of Hong Kong held a meeting in Shenzhen to formally abolish the double auditing system of A + H cross-listed companies.The cancellation of the double audit system reduces the cost of the listed enterprises in Hong Kong,avoids the repeated audit and makes the accounting firms in the mainland qualified to audit H shares at the same time.In view of this fact,this article is based on the time point after the cancellation of the double audit system,the impact of audit independence and the legal environment are distinguished,the spillover effect of cross-listing on the audit quality of A shares after the cancellation of the double audit system are intended to be studied in this thesis,In the meantime,the cancellation of double audit also makes the "non-big four" firms obtain the qualification of auditing H shares.Therefore,the degree of reaction of "big four" and"non-big four" to spillover effect are also probed from the dimension of firm size.In addition,state-owned enterprises play an important role in the capital market of our country.Therefore,the degree of reaction of enterprises with different property rights to spillover effects is analyzed from the perspectives of property rights.The existing researches on cross-listing and audit quality are relatively few,but most of the researches on cross-listed companies in China before 2010 is based on the data before 2010.There is few researches on the 2010 relationship between cross-listing and audit quality after the cancellation of double audit system.What's more,the existing researches on the "big four" and "non-big four" in the audit quality under the strong legal environment are controversial(Choi et al.,2008;Francis and Wang,2008).However,because of the comparisons among different countries,the influences of relevant variables such as national characteristics are difficult to be eliminated.The features of this paper are:(1)The Research on the relationship between Cross-listing and Audit quality is supplemented after the cancellation of double Audit system.(2)In view of the research controversy of audit quality under strong institutional environment,this paper takes A +H cross-listed company as a sample to reduce the influence of relevant factors with national characteristics.Based on the principal-agent theory,insurance theory,signaling theory,reputation theory and risk-oriented audit theory,the inherent mechanism of spillover effect is analyzed in this thesis.And from the perspectives of two dimensions of the firm's sizes and the property rights' natures to make expectations for the extent of the spillover response.The expected findings of this paper are as follows:(1)After the cancellation of the double audit system,cross-listing will still have a positive spillover effect on the audit quality of A shares.(2)The spillover effect of cross-listing on A-share audit quality is more obvious in "non-big four" firms.(3)Considering the nature of property rights,cross-listing of A-share audit quality spillover effect is more obvious in state-owned enterprises.This paper research the relationship between cross-listing and audit quality after the cancellation of the double audit system.And from the two dimensions of firms' size and property rights,this paper probes into the extent of the spillover effect of cross-listing on A-share audit quality between "big four" and "non-four",and between state-owned and non-state-owned enterprises,thus providing some suggestions for our domestic capital to become bigger,stronger and promote the reform of state-owned enterprise.