The Impact Of Auditor's Individual Industry Expertise On Audit Quality

The audit quality of certified public accountants shall be determined by the accounting firm and the internal auditors.In recent years,the focus of relevant research has gradually shifted from the "macro level" of accounting firms to the "micro level" of certified public accountants.Since Australia,Chinese mainland,Taiwan and a few other countries or regions required the disclosure of personal information of signature accountants,the United States also issued a corresponding policy requiring the disclosure of the names of audit partners from 2017,and cpas have drawn further attention from academia and practice circles.From the theoretical point of view,auditing is a highly professional business.As an individual certified public accountant is entrusted by the owner to audit the company's financial and business conditions,he/she should have strong professional competence.In the whole audit project process,the impact of the signature accountant's professional competence as the leader on the audit quality is particularly critical.The industry expertise of the auditor as an important part of the professional competence of certified public accountants has a direct impact on the audit quality is crucial.There is a theoretical and practical need to study whether auditor's individual industry expertise can improve audit quality.Starting from this point,this paper first sorts out,analyzes and critically absorbs the research results of domestic and foreign scholars on this aspect.Then,the relevant basic theories are clarified,and the theory of competitive strategy,principal-agent theory,reputation theory and insurance theory are taken as the theoretical support of the whole paper.On the basis of relevant theories,the influence of auditor's individual industry expertise on audit quality is discussed through further theoretical analysis.Then,identifying industry experts by referring to customer quantity method and market share method,taking Chengxing and Lianhua as the research objects,this paper adopts the dual-case comparative analysis method in the multi-case study to compare the differences of audit quality indicators between the two enterprises from the perspectives of audit fees,audit opinion,discretionary accruals and offline project,and discretionary accruals are calculated using the modified Jones model.The study concludes that industry experts receive higher audit fees,are more likely to issue non-standard opinions without reservation and are more able to inhibit earnings management,that is,the auditor's individual industry expertise has a positive impact on audit quality,when the auditor is individual industry expertise,audit quality is higher,conversely,audit quality is lower.As far as the findings are concerned,we can draw inspiration that proactive policies should be adopted to encourage and support the cultivation of auditor's individual industry expertise.Based on this,this paper finally puts forward suggestions and countermeasures to improve audit quality by developing auditor's individual industry expertise in the industry from four aspects: establishing industry reputation database,training certified public accountants to specialize in auditing,payingequal attention to professional education and vocational training,and paying attention to the construction of audit database.