The Gender Characteristics Of Internal Control Audit Team,Audit Firm Size And Internal Control Audit Quality

The quality of ICFR audit is the guarantee of internal control structure building and financial information quality for companies.The high-quality ICFR audit reports and effective ICFR audit market are conducive to the sustainable and healthy development of the securities market.In 2010,the five ministries and commissions issued the "Guidelines for the Internal Control System of Enterprises",which requires that from January 1,2011,68 companies listed both at home and abroad should be as pilots,and accounting firms should be hired to audit the effectiveness of internal control over financial reporting in these companies.This unveiled the prelude to mandatory ICFR audit.In 2012,the Ministry of Finance issued the'"Notice on the Implementation of the Internal Control System for the Classification of Listed Companies in the Main Board in 2012",clarifying that all listed companies must disclose ICFR audit reports and promoting the implementation of mandatory ICFR audit in the mainboard listed companies.Taking the disclosure of 2017 internal control audit reports as an example,as of April 30,2018,40 accounting firms issued ICFR audit reports for 1763 listed companies,of which 45 were issued with unqualified opinions with emphasized matters and 34 were issued with negative opinions,the percentage of unclear opinions is about 4.45%.But on the other hand,the current accounting firms in China are fiercely competitive,the government supervision is weak,the legal and regulatory systems are not perfect and other factors make the legal risk of internal control audit lower.Under the background of such a special system,it is of great theoretical and practical significance to study which factors affect the quality of ICFR auditing and promote the healthy development of Chinese domestic auditing market.Auditors'characteristics are considered to be an important factor affecting the quality of auditing.Over the past decade,many literatures have concluded that auditors'personal characteristics affect the quality of financial statements audit.However,individual auditors do not work completely independently.The impact of the audit team characteristics on audit quality may be different from the impact of individual auditor characteristics on audit quality.At present,domestic and foreign scholars focus on the impact of personal characteristics on audit quality,but little is known about how the structure of audit team affects the quality of auditing.Therefore,this paper starts from the perspective of the internal control audit team,and studies how the gender characteristics of the ICFR audit team and the size of the audit firm affect the quality of ICFR audit.Besides,we test the adjustment effect of audit firm size on the relationship between the gender characteristics of the audit team and ICFR audit quality.And the possible mechanism of the internal control audit team's gender characteristics on the quality of ICFR audit were tested.The empirical results of this paper show that(1)among the companies affected by the mandatory disclosure of ICFR audit report policies,the proportion of women in the ICFR audit team has a significant positive impact on the quality of ICFR audit;(2)the size of the audit firm has a significant positive impact on the quality of ICFR audit;(3)further research found that the size of the audit firm enhanced the positive impact of the proportion of women in the ICFR audit team on the quality of ICFR audit;(4)the positive effect of the increase in the proportion of women in the ICFR audit team on the quality of ICFR audit may be due to more audit efforts.The research contribution and innovation of this paper mainly include the following two aspects:(1)The research on the relationship between auditor's personal characteristics and audit quality are rich,but there are few studies on the relationship between audit team characteristics and audit quality,so we have enriched this research area.(2)At present,at home and abroad,scholars focus on the quality of financial statements auditing,and the research on the quality of ICFR auditing are still few.We draw on the internationally latest measurement method of ICFR audit quality,and compare the formal audit results(i.e.,ICFR audit opinions)with the actual internal control situation of the audited object(i.e.,the internal control quality of the audited entity).Then,the degree of conformity between the two dimensions is divided into three categories:high,medium and low,which enrich the research on the measurement methods and influencing factors of ICFR audit quality.