The Effect Of Auditor-Clientrelationship On Audit Quality

Since the 21st century,a series of listed companies in the world financial fraud cases,so that the reputation of the CPA industry has been an unprecedented impact,triggering a serious confidence in the CPA industry crisis.Especially in the agricultural industry,due to the existence of certain difficulties in the audit,financial fraud occurred frequently.One of the problems that often overlooks is the relationship between private relations and the quality of audits when analyzing and reflecting the reasons why CPAs do not discover and disclose accounting fraud in listed companies.That is,whether the auditor and the customer there is a private relationship,causing the audit quality is low.The problem is an important issue in recent years,such as regulatory authorities,academia,and practitioners.This paper first analyzes the existing research results at home and abroad,and carries on the simple evaluation to it,then carries on the analysis to the related theory.The analysis suggests that when people make decisions,they are often affected by emotional or interest relationships,and although the CPA has a high professional quality,private relations will also affect the quality of its audit,it is necessary to further study this issue The Then,based on the theoretical analysis,this paper puts forward the hypothesis of this paper.In the empirical part,the data of China's agricultural listed companies from 1999 to 2015 are used to examine the impact of the relationship between auditors and clients on auditing quality from two aspects:audit opinion and audit fee.If the customer follows the auditor's job-hopping,it indicates that there is a close personal relationship between the client and the auditor.The study shows that when the auditor has a private relationship with the client,the probability of obtaining a non-standard unqualified audit opinion is lower and the audit fee is lower.The results of this study show that when the auditor and the customer have a close relationship,the audit fee is lower,and the probability of obtaining the standard unqualified audit opinion is bigger,which makes the quality of the audit judgment decline.Due to the particularity of agricultural listed companies,it can not be as high as possible expansion of other enterprises,and there are policies and the government to spare no effort to support,so that it has a greater audit risk.The special business model of agricultural listed companies determines that there is a great difficulty in the audit work.Therefore,the impact of the private relationship between the auditor and the client on the quality of the audit judgment is particularly evident in the agricultural listed companies.Therefore,this paper carries out empirical test on the data of agricultural listed companies,proving the hypothesis proposed in this paper.