The Contrast Research On Audit Quality Of Big Four And The Local Auditor Firms

The difference of audit quality between the foreign and the local auditor firms always received much more attention from the public. One hand, the foreign auditor firms get the trust of the public relying on advanced inside management, professional technique and professional experience. On the other hand, the foreign auditor firms misplayed in some audit cases in China constantly, which makes the public doubt about the audit quality of the foreign auditor firms. Therefore this paper will research on if it exist salient difference of audit quality between foreign auditor firms (taking Big Four as representation) and the local auditor firms. If it exists, the difference is reduced or not. This research is useful to learn about the position of the foreign and the local auditor firms in china's audit market, and can help the public deal with them correctly.In the paper, first, it introduced the reason and the background of the research. Then through the review of the literature over audit quality of auditor firms, we learn about the situation of the research in this field. Second, in the empirical research, we analyzed the actuality of the foreign and the local auditor firms, which we found that the audit market get more trust to the big four. Through the regression analyze, using the earning management as index of audit quality, it selected the listed companies which get the standard audit opinion from 2003-2006 as the sample of the study and used the Section Revisory Jones Model to analyze. We get the Discretionary Accruals of the companies, and compare them. Then we get the conclusion that the difference of audit quality between the big four and the local auditor firms is not salient. Aim at this conclusion, we discuss the reason from three aspect: audit market, audit object, auditor firms, and analyze from the theoretic. At last, we get the conclusion of the research and give some advices.