The Correlation Research Of Audit Committee Characteristics And Audit Quality

Information of true and fair is the lifeblood of the existence and development of capital markets.Quality of accounting information of listed companies has been the focus of attention.Facing quality of accounting information,government has taken some effective measures.January 7,2002, China Securities Regulatory Commission Oversight Committee and the Economic and Trade Commission jointly promulgated the "Corporate Governance Guidelines",which recommends the establishment of a listed company audit, strategy, compensation assessment and other committees.In the audit committees, independent directors should be dominant, and the audit committees have at least one financial expert.The guideline also gives the board certain responsibilities.In particular,The West took place a series of financial fraud case.Audit committee system, as a corporate governance structure,is an important institutional arrangement, which is originally conceived as the board of directors to seek an independent financial management of the power.Through the strengthening of the company's financial reporting process,the system reduces the company's management and asymmetry of information and strengthens the authenticity and reliability of financial reporting.Board of Directors as the core of modern corporate governance system, the Audit Committee has increasingly been received attention.As an important link in corporate governance,the Audit Committee could improve audit quality or not.With the features of the Audit Committee can more adequately carry out its functions.The study of these issues, not only has a good theoretical value, but also has a strong the practical significance.It is a subject worthy of further study. These aspects are the main points discussed in this article.The paper reviews the development process and the responsibilities of the Audit Committee.As a starting point, using principal-agent theory and the corporate governance theory explores the operational mechanism of the Audit Committee.Then the paper uses the EXCEL and SPSS 15.0 software for analysis and uses empirical research method.The paper chooses the 2005 -2007 year matching the filter conditions of the nearly 4.000 listed companies,to study the establishment of the Audit Committee to reduce the extent of earnings management of listed companies and further enhance the high quality of auditing. And the paper further does study the Audit Committee of the characteristics (independence, active nature, scale) and earnings management to find whether there is a significant correlation between them.This paper is divided into six overall structure,this article first discusses some of the major research background and research purposes as well as research methods and thesis structure,and the second is part of literature review which reviews home and abroad articals on the Audit Committee and the quality of audits accumulation of relevant research literature.The third part is the theoretical analysis of the Audit Committee, the part of the theoretical analysis is section of this article which looks into the development process and the evolution of their duties, and then principal-agent theory and the corporate governance theory, combined with the status quo of China's management of the Audit Committee.The fourth and fifth are part of the research hypothesis and research steps. This paper proposes four hypothesis,focused on the Audit Committee and its characteristics and the quality of audits related to research.The sixth is the conclusions of the study articles, research limitations and future research directions which put forward suggestions for improvement, combined with the status quo of China's governance of the Audit Committee.The empirical results shows that the establishment of the Audit Committee can significantly reduce the extent of earnings management and improve the audit quality. Further studying the audit quality and Audit Committee Characteristics finds the higher the independence of the Board of Auditors, the more able to reduce the extent of earnings management, but the effect is not significant. The size of the Audit Committee and audit quality is negatively correlated, but dones not reach statistically significant requirements.At the same time, this article also finds that the Board's active and Audit Quality is a significant negative correlation. The more frequent the number of meetings does not reduce the extent of earnings management to achieve the purpose of improving audit quality, but raises a surplus management of lower audit quality to some extent,such a result with the opposite hypothesis.The author had a lack of theoretical foundation,this paper only selected agency theory and corporate governance theory to the analysis of the Audit Committee to study the unusual point of view to study the depth of shallow. Theoretical analysis is thin.The paper use the frequency of meetings with the board of directors to replace the number of meetings of the Audit Committee of the variable as a research activity, this approach may be defective.This paper put forward constructive proposals.First,improve the system,While the establishment of China's Audit Committee is still in the voluntary phase,the Audit Committee system has been the beginning of the current results,showing a certain degree of policy effects.The audit committee do play a certain role in the company,alleviate the information asymmetry and protect the interests of investors.In order not to make China's audit committee system to be a mere formality, we should fulfill the responsibilities of the Audit Committee and the Audit Committee effectiveness.to improve corporate governance standards, regulators should effectively improve the system of the Audit Committee.This paper concludes with future research directions:first, the further refinement characteristic variables, articals could exam these characteristics variables on audit quality and add some characteristic variables,such as the Audit Committee "government background" members of the proportion of management positions both in the holding units in the proportion of directors.It could also consider the establishment of the Audit Board of the time as one of the characteristic variables, the Audit Committee established by the length of time may affect the quality of auditing. Second, about audit quality measure,the paper could consider using other models (Healy, DeAngelo) and other model sensitivity tests to reduce the accrual model of the noise caused by the inference errors and reduce the use of a single model brings error. Third, the paper should consider China's political, economic, environmental and institutional context and the market economy.also could use of multi-disciplinary theory of the Audit Committee and audit quality in-depth study of the relationship between.Third, the research methods of innovation, due to the disclosure of the contents of the Audit Committee of China's incomplete, the paper can consider the use of case studies, questionnaires, field studies and experimental research in a number of ways to make up for the disclosure of the contents of the Audit Committee of the defect caused by incomplete.China's audit committee system is still in the introduction and exploration phase, incomplete disclosure limits the space to carry out academic research, but which is also an opportunity for more research, you might consider the use of case studies,questionnaires, field studies,experimental study and other methods, further in-depth discussions to get unexpected research results.