The Empirical Test Of The Audit Fees Based On Agency Cost Financing Way

The Empirical test of audit fees has been studying for more than 20 years sincnc Simunic studied the 10 factors that may affect the audit fees using multiple linear regression model in 1980 .He found that the assets of the company is determine factor , followed by the number of subsidiaries involved Industry types, the rate of assets and liabilities, profit and loss situation two years ago, the annual audit of the audit opinion on the type of listed companies as well as internal audit costs, yield accounting, auditing firms and the scale of such factors in the regression equation is not significant.As the economy scandal appeared frequently, it exposed corporate governance widespread problem. Internal control is not yet perfect, the Acting conflicts, agency costs higher. Western audit pricing research fields have begun studied the impact of audit pricing from the model Simunic extended to the agency cost. China's audit pricing study majorly based on the model started Simunic, variable selection focused on the financial data, intentionally or unintentionally ignored the impact of pricing audit listed companies deeper factors - internal governance.There is a big difference in China's legal environment and the development of the audit market with Western countries. In this case, there is not sufficient evidence about the theory of agency costs is still used in audit market of China. Therefore, I believe that it is very important to study the audit fees on theory of agency cost. In this paper, I will the study of Chinese audit fees on theory of the agency cost using empirical research methodology. In summing up the outcome of the research at home and abroad, I give a related assumption about agency costs and audit fees on the basis of our audit fees theoretical analysis in 2005-2006 for the ShangHai A-shares, and select variables using regression model test Simunic audit fees factor. Draw: Assuming 1, under the same conditions, it is a positive correlation between the free cash flow and audit fees; Assuming 2: under the same conditions, the higher the proportion of long-term liabilities, free cash flow effects on audit fees is smaller .Assuming 3, under the same conditions, it is a positive correlation between the proportion of the first major shareholder shares and audit fees.the three assumptions have been tested. Aumption 4, under the same conditions, it is a positive correlation between the proportion of state-owned shares and audit-related fees; assumptions 5, under the same conditions, it is a positive correlation earnings management and audit costs ,the two assumptions have not found evidence seized,...