All Circulated Shares Issue And High Auditing Quality Need

Auditing is an important mechanism to reduce the degree of asymmetry information in and outside the corporations, however, the mechanism must base on the systematical environment, some researches have showed that the systematical environment touches the demand of high-quality auditing. In china, there had difference between Circulated stock and un-circulated stock, which reduced the demand of high-quality auditing. The reformation of stock's circulation difference have solved the stock's circulation problem, and consolidate the interest between the block(large) shareholders and other shareholders, let the large shareholders pay more attention to the stock's price and the information content of stock's price, therefore, raise the companies' need for high-quality auditing. As an important part of the reformation, the have the good influence to companies' need for high-quality auditing. To test this, this paper Uses the data of IPO between 2004 to 2006,we test the change of companies' need for high-quality auditing before and after the use of All Circulated Shares Issue.The results are : (1) the markets shares for high-quality auditors have a significantly raise after the use of All Circulated Shares Issue ,(2) the markets shares for high-quality auditors in the SOES' have a significantly raise after the use of All Circulated Shares Issue,(3)Compared to the data before the use of, the correction between asymmetry information variable and choice to high-quality auditors is more significant after the use of All Circulated Shares Issue, as the same to the agency cost variable.This study support the view that the use of All Circulated Shares Issue have raised the companies' need for high-quality auditing...