The Impact Of Integrated Audit On Two Types Of Audit Fees And The Quality Of Financial Reporting Information

In order to strengthen the supervision of enterprise internal control,the five ministries and commissions such as the Ministry of Finance successively promulgated the “Basic Norms for Corporate Internal Control” and the “Guidance for Internal Control of Enterprises” in 2008 and 2010,which on the basis of the US SOX act.In the guidelines,the concept of “integrated audit” was first proposed,and the same company's internal control audit and financial statement audit were encouraged to be integrated and executed by the same accounting firm.This indicates that the supervisory authorities recognize that companies need to undertake higher implementation costs in compliance with internal control regulations,so allow accounting firms to consider cost-effectiveness in the integrated audit.Integrated audit originated in the United States and the United States requested enforcement,but China can choose to implement it.This article uses China's unique system of free choice of integrated audit model to conduct the mandatory audit of internal control during the 2012-2016 A-share listed companies as the research object,mainly studies the impact of the integrated audit on the two types of audit fees and the quality of the financial reporting information respectively,so as to explore the impact path and the impact differences in different situations.The findings are as follows:(1)Compared with non-integrated audit,integrated audit can significantly reduce the financial statement audit fees,internal control audit fees and total audit fees,which is mainly due to the increase of auditing transaction efficiency brought by the scale synergy under the integrated audit.At the same time,it is found that the scope of the audit fee reduction in the financial statements is equal to the decrease in the audit fees of the internal control under the integrated audit mode,which indicates that the synergy effect of the integrated audit flows evenly to both the financial statement audit and the internal control audit.(2)Due to the lack of full protection of audit professionalism and independence,integrated audit will reduce the quality of the financial statements information.At present,there is no detailed guidance and norms on the integrated audit and the legal risk brought by the integrated audit is low.As a result,integrated audit will reduce the audit quality,finally resulting in lower quality of information in the financial statements.(3)In addition,after grouping the samples according to the scale of internal control auditing firm,we found that if the firm performing internal control auditing is the top 4 in the world,integrated audit will not reduce the quality of the information in the financial statements.It proves that the strong business capability of accounting firms can alleviate the adverse effects of integrated audit brought to the enterprise financial information quality.Moreover,after grouping the samples according to the number of subsidiaries,it is found that the implementation of integrated audit on enterprises with high level of operational complexity will significantly reduce the quality of financial reporting information,while the implementation of integrated audit on enterprises with low operating complexity will not affect the quality of financial information.The above research conclusions imply that China needs to take measures to regulate the integrated audit currently so that it can truly achieve the goal of integrated audit.At the end of the paper,the relevant policy recommendations are put forward in accordance with the empirical results.