Research On The Effect Of Earnings Management On Audit Fee Under The Integrated Audit System

After financial fraud incidents in WorldCom, Enron in the United States, for the order of capital market and rebuilding the confidence of investors, in July 2002, the United States enacted the sarbanes-oxley act (SOX act) requiring companies to implement internal control effectiveness audit. The Auditing Standards No.5-internal control auditing combined with a financial statements audit the financial reports (PCAOB AS5) in July 2007 was published by the U.S. Public Company Accounting Oversight Board (PCAOB), putting forward the concept of integrated audit.The audit of internal control system of our country has to establish since 2006 gradually. Shanghai and Shenzhen stock exchanges expressed public accountants should review enterprise’s internal control effectiveness in the enterprise’s financial report audit as relevant regulations. And in 2010 April,the concept of integrated audit was proposed in China, the ministry of finance, securities and futures commission, the national audit office, the China banking regulatory commission, insurance regulatory commission five ministries jointly issued "enterprise internal control specification guide" which forces the listed companies in China to implement internal control audit, and referring to the certified public accountants can choose to carry out integrated audit listed companies:certified public accountants can decide whether to carry out internal control auditing listed companies only, or choose integrated audit-the audit and internal control audit together. Guide pointed out that with the listed companies perform internal control audit, the certified public accountant should check the validity of the design and operation of the enterprise internal control in order to achieve the goal at the same time.The changes of internal regulation and external environment can not only cause the changes of financial information quality but also affect CPA’s audit way, resulting in the change of audit fee. Whether the audit will impact the earnings management and audit fees and what impact is the focus of this paper. Therefore, based on the above background, this paper describes the development and current situation of the world wide integration audit, and studies the relationship between earnings management and audit fees, the integration of audit fees, and the relationship between earnings management and audit expenses. And then the theoretical basis and system background are described. This paper collected the implementation of the audit of the integration of Chinese Listed Companies during 2013 to 2011,empirical research through the analysis of the design model, tested the following contents:after the implementation of the integration audit in 2011, the quality of our financial information has been effectively improved, The implementation of integrated audit of enterprise audit fees, and the implementation of the integration of the audit of the enterprise earnings management and audit fees and why the relevant relationship. On this basis, the paper explores the future of the audit in the direction of the capital market in China.Through the empirical analysis results show that:the implementation of integrated auditing system and listed companies earnings management behavior in the presence of significant negative correlation, which is the integration of audit implementation can effectively restrain the earnings management behavior of listed companies; The implementation of the integrated audit system and the integration of the audit fees for the listed companies has a significant negative relationship, that is, the total audit fees paid by the listed companies of the integrated audit are less; Under the integrated audit system, the earnings management of the listed companies is positively related to the cost of the integration audit, The implementation of the integrated audit makes the CPA more easy to identify the earnings management behavior of the listed enterprise, For the audit risk and more workload by the earnings management of the listed companies, the firm will charge higher audit fees.