The Empirical Study On Effect Of Auditor Switch With Signing Cpa’s Job-hopping On Audit Opinion

As independent agencies, accounting firms connect the owner and manager, also the public and the enterprise, it plays an irreplaceable role in today’s economic activities and act as the "economic police". When client changes the public accounting firm, people will pay attention to this matter and enquire the content of information.So, accounting firm changing is one of the hot debated topics among academia, social public and regulators.Because in our country auditing market is a buyer’s market, the listed companies have strong power in auditing relationship, leading to frequent changes in accounting firm. By the end of2009, more than thousands of public company changed accounting firm. From this, we can find that many listed companies hire new accounting firm without changing certified public accountants. Through the literature review, we found that these studies about the correlation between the accounting firms’change and audit fee, opinion and audit quality were mostly based on the perspective of accounting firms, but not on the CPA who signed. At present, the study on this special phenomenon is few, also there is no systematical research on the reasons and economic consequences of it.This article is based on this phenomenon and investigate the effect on the audit opinion. Accounting firm change can be classified into two kinds:the change with certified public accountants "job jumping" and normal change by whether the signing certified public accountants "job jumping" will take the client away with it. Then, analyze the reasons of client change with the accountant based on proprietary theory, human relationship theory and audit conspiracy theories. Secondly, study the interaction between the change of certified public accountants "job jumping" and the audit opinion investigate. Finally, we analyze the influence of audit tenure of the signing CPA on audit opinion. To guarantee the reliability, we did robustness inspection, to test the reliability of the conclusion. We investigate the influence on audit opinion by using descriptive statistics and logistic regression model.The results shows:the probability of obtaining qualified opinions is higher after changing the accounting firm which is company with the signing CPA’s job jumping. But it does not prove client changing may make significant improvement in audit opinion, that’s to say, the result does not support the change can achieve audit purchase. At the same time, in the sample that client change firm with signing CPA’s job jumping, the longer the tenure of the signature CPA the more positive of the audit opinion. This shows the certified public accountants will give more favorable audit opinion if this special relationship maintains longer. In order to ensure robustness of the research conclusion, this paper also carry a robustness inspection, the analysis results are the same with the regression analysis. At the end of the article it notes the limitation and insufficient of the paper, and point out the direction for further research. Finally, we give some suggestions in the drawbacks of relevant laws and regulations about the accounting firm and the certified public accountants to perfect the audit market.