An Empirical Rerearch Of Audit Fees

Audit fees are the economic link between CPA and audit clients. Since SEC required the companies to disclose external audit fees at the beginning of 1980s, foreign scholars have studied different aspects about audit fees in securities market Their studies discussed supervision and audit quality from the point of audit fees. In 2001, China listed companies were required to disclosed their external audit fees for the first time. The pay to CPA went secret to open, which is the turning point of audit study. The paper reviewed related literature, analyze the supply and demand's present situation of audit fees and interrelationship of audit fees and audit quality in the audit securities market.This paper mainly establishes two empirical models. Model 1 mainly discusses determinants of annual audit fees of the listed companies, and Model 2 mainly discusses how do audit fees affect audit quality. After screening samples, we get 258 samples in 2002, 288 samples in 2003 and 239 samples in 2004, which amount up to 785 listed companies.Through empirical analysis, this paper obtains the following main conclusions: (1) Audit fees can basically reflect CPA's working in China's stock market The larger is the company, and the more the merge subsidiaries are there companies, and the bigger is the ratio of receivable accounts to total asset, the more highly audit fees paid to CPA. The size of audit clients is one of most important determinants to audit fees. (2) We discover that there is relationship between quality characteristic of audit product and audit fees. Both the international Big4 and the native Big10 obtain the audit premium. But through further analysis we discover that the international Big4 dare to say "No" to the listed companies by their high grade prestige that is established by high quality in audit service, so as to obtain more audit fees. Although the native BiglO has certain brand effect, we don't find any evidence to prove that enhancement in audit quality. (3) We don't find obvious evidence to prove the existence of Low-balling. The price strategy is not only methods for CPA's firms to compete. In China securities, the company can easily reach its intention of purchase audit opinion through replacing CPA's firms, not through the non-audit service. To overwhelming...