Research On The Impact Of Digital Transformation Of External Audit On Earnings Quality

The high-quality and steady development of the capital market requires enterprises to disclose credible financial reports.The information content of accounting earnings in financial reports is the information basis for contract signing and decision-making.It can have an important impact on stock price,compensation contract,debt contract,going concern forecast and so on.External audit is considered to be an effective mechanism to curb the opportunistic behavior of management and ensure the disclosure of reliable financial information.In the era of digital economy,the development and application of digital technology has caused a series of organizational and management changes and business model innovation in accounting firms.The digital transformation of external audit will improve audit as a mechanism to restrain earnings management,play a role in improving earnings quality and alleviate relevant agency problems.Based on agency theory,information asymmetry theory,knowledge sharing theory and dynamic theory,this thesis takes Chinese accounting firms as the research object to explore the impact of digital transformation of external audit on earnings quality and its mechanism,selects Chinese A-share listed companies from 2017 to 2020 as the research sample,and uses Stata16 statistical software to test the relationship between digital transformation of external audit and earnings quality.On this basis,this thesis introduces the intermediary variable enterprise digital ability,constructs the enterprise digital ability index based on the manually sorted enterprise digital software and hardware investment data and the digital technology application data obtained from text analysis,and tests the intermediary effect of enterprise digital ability in the impact of external audit digital transformation on earnings quality.The results show that:(1)the digital transformation of external audit has a significant negative correlation with operable accruals.The smaller the controllable accruals,the lower the degree of earnings management,the higher the earnings quality,that is the digital transformation of external audit has a positive impact on earnings quality;(2)The digital transformation of external audit has a positive impact on the digital ability of enterprises,that is the digital transformation of external audit can improve the digital ability of enterprises;(3)The digital ability of enterprises has some intermediary effects in the impact of the digital transformation of external audit on earnings quality.In other words,the digital transformation of external audit has an effect on earnings quality by affecting the digital ability of enterprises to a certain extent.Combined with the empirical conclusions,this thesis puts forward four suggestions:CICPA needs to speed up the formulation of standards and guidelines related to external digital audit;The office shall increase the investment in digital project construction;Firms must recruit and train digital talents;Enterprises should enhance their digital capabilities.