Factors Influencing Audit Quality

Along with the fast development of the capital market, the CPA audit quality plays an utterly important role in the stabilization and improvement of the capital market. But recently, with a series of fraudulent financial reports were explosed in the world-wide, for example, "Enron"in the USA and "yin guangsha" in our country, the reputation of the CPA industy have been seriously damaged. Poor audit quality will lead to the audited financial information distortion, and the investors may misjudge the company's market value.What's more, it will also disrupt the function of the market allocating resources. Therefore, the quality of the audit become the focus of the theoretical and practical scholars all over the word.In this case, this paper tries to reserch the main influencing factors of the audit quality, include auditor size, industry expertise, audit fee, audit tenure and non-audit service. Then there is an empirical research to test and verify the theory before mentioned by using the basic Jones model and the data of listed companies in 2007 and 2009. In the end, there are some advices on how to improve the audit quality and the audit market.There are six sections in this thesis. The first section is introduction, which is about the background and meaning of the research, the literature reviews, main content and structure and research method. The second section is about the audit quality theory and the influencing factors. The third section is about the research hypothesis, variable and sample selection and model setting. The fourth section is about the empirical conclusions and some reasonable explanations related to the empirical conclusions. The fifth section is some advices on how to improve the audit quality and the audit market according to the empirical conclusions drawn from the empirical study. The last section is about the conclution.