The Empirical Research On The Relationship Between Auditor Tenure And Perceptions Of Audit Quality

In recent years, lots of audit failure have been reported world wide: the listed companies tried to cheat in accounting, and the firms, as the auditors of companies, find no fault or sign fake audit reports. The auditing scandals'breaking out seriously damages inventors'interests, and shakes the public's confidence towards the stock market. In the meanwhile, audit quality of the auditors suffers a wide doubt in public and the auditing public confidence has a critical loss, thus leading a crisis of confidence to the audit profession. People found that audit quality is very important when re-think the audit failures'reasons. And recent research has wildly paid much attention to the relationship between audit quality and audit tenure. The paper is based on the analyze of Accountability, putting forward the newconcept the perceptions of audits quality in the foundation of audit quality, and making use of a listed company annual report's information to verify the relationship between audit tenure and perceptions of audit quality in Chinese capital market through theories research and empirical research.This paper wants to answer these problems:First,does the relationship between audit tenure and perception of audit quality exists?Second, does the relationship between reported earning E, changes in reported earningΔE and ERC and perception of audit quality exists?Third, does the relationship between E ? Tenure,ΔE ?Tenure andβ3 +β4 and perception of audit quality exists?The paper organized as follows:In the first section, I mainly introduce the research background of thesis, the research contents, the research methods and the research creative meanings and contents frame;In the second section, I look back to related literature of audit quality and perceptions of audit quality, instruct this paper, and evaluate;In the third section, I discusses theories research on audit tenure and perceptions of audit quality. And put forward the new concept the perceptions of audits quality in the foundation of audit quality.I firstly explain the difference in two concepts of audit quality and perceptions of audit quality, and by taking the inventor as the Accountability's final client and one of the capital market's wildest powers and customers of audit, we see the importance of the inventors in capital market. It's why this paper discusses in the views of capital market's inventors.Secondly, I carry on detailed theoretic analysis in relationship between audit tenure and perceptions of audit quality in the foundation of perceptions of auditors competence and perceptions of auditor independence;In the fourth section, I study the empirical evidence of the relationship between audit tenure and perceptions of audit quality, including the perceptions of auditing quality and audit tenure measure standard, basic assumption, the data, sample selection and the empirical evidence and empirical evidence result. We take the CMAR(Cumulative Market-adjusted Returns) as a substitute for perceptions of audit quality, and exam the relationship by regression analyze of the listed companies in industry of shanghai stock market in 2001~2005.In the fifth section, I come to the results and suggestions.The results are: 1, the audit tenure and the perceptions of audit quality have a positive relation with each other. 2, the regression analyze suggests that only the audit tenure and changes in reported earnings have strong relationship with perceptions of audit quality which implies domestic inventors'decisions are not reasonable.3,β3 +β4 and the perceptions of audit quality have a positive relation with each other.The innovation of this paper lies in: first, I analyze the relationship between audit tenure and perceptions of audit quality in the foundation of inventors'response; second, I define the audit quality and perceptions of audit quality in a new way; and analyze the influence of inventors'response on perceptions of audit quality.