Research On The Effect Of Common Auditor On Audit Fee And Audit Quality

In the past three decades,a large number of experts and scholars at home and abroad have studied the factors affecting audit fees and audit quality.Nowadays,in the face of fiercely competitive audit market,how to improve audit quality and reduce audit fees to improve the accounting firm's competitive advantage and core competence has become one of the topics that everyone is constantly exploring and working.Most of the existing research is caught in a cycle of increased audit fees as audit quality increases.However,knowledge spillovers in the supply chain provide new perspectives and possibilities for in-depth study of audit fees and audit quality.This paper studies the problems of audit fees and audit quality through the perspective of knowledge spillovers in the supply chain.On the basis of systematically reviewing the existing literatures at home and abroad,it follows the "theoretical basis-hypothesis-establishment of the model-empirical research-conclusions and recommendations" research route,the empirical study of the impact of shared audit on audit fees and audit quality by using the listed companies in China stock market from 2012 to 2017 as samples.The conclusions of the study indicate that audit quality is affected by audit fees and increases as audit fees increase.Common auditor generates an audit fee premium due to the supply chain knowledge spillover.When the common auditor of the audited entity and its main customer is the same office of the same accounting firm and the same signed CPA,common auditor generates synergies in knowledge that can reduce audit fees.The impact on the audit quality is also significant.When the audited entity shares the auditor with its main customers,it helps to control the operational accruals of the audited entity,thereby improving the audit quality.When the common auditor is the same office and the same signed CPA,the effect of this audit quality improvement is more significant.Therefore,this paper concludes that when the audited unit and its main customers hire the same office and the same signed CPA to provide audit services,they can improve audit quality while reducing audit fees to implement differential costs strategy in the fierce audit market.