The Correlation Of Earnings Management And Audit Fee

Audit fee is paid by the comptroller to buy a series of professional service cost, it is a final agreement prices reached by auditors.This suggests the relationship of the supply and demand between the auditors and the listed companies. Since 2001, In China,the official started to put the audit fee disclosure policy implementation into effect, this has very important significance to the improvment of the information of enterprise. The study for influencing factors of audit fees, many of the domestic and foreign scholars have made theoretical and empirical analysis, The aim is to influence audit fee through these factors.To have a better understanding of the market pricing mechanism, it can not only to avoid the service quality of enterprise audit declining trend, but also to limit some accounting firms to use the advantage of lower prices to attract customers, Finally it can realize the healthy operation and development of the audit market in China.With the increasing development of the securities industry in our country, a growing number of the domestic listed companies has been expanded, many scholars have started to analyze the general factors that affect audit fees,in recent years, many scholars focus on studying some potential factors of influencing audit fees, Therefore, the domestic and foreign scholars began to focus on an important potential factor which influencing audit fees- earnings management. In reference to some relevant theoretical knowledge and based on the summary of the academic research institute, this paper uses the method of theoretical and empirical research, and selected 1348 data from two cities, the Shanghai and shenzhen from 2011-2013 as the research sample, mainly for sure of relationship between our country enterprise management and implement earnings management behavior and audit costs. Because of the enterprise internal control the quality level of the differences and changes. If it will affect the direction and influence degree. Considering the actual conditions of China at present, so the substitution variable of earnings management use SPSS software to multiple regression analysis, the result showed that the surplus management of audit fees has significantly positive effect.Internal control always exists in all aspects of the enterprise, and at the same time, The quality of the listed company’s internal control is not only means more financial reporting,but also the ability to guarantee enterprise effectively guard against finantial risks and operate risks. the level quality of internal control is to measure whether effective management of the enterprise. In other words, ultimately to achieve the goal of management of listed companies to provide a reliable guarantee. Based on the above analysis we can know, in the listed company earnings management of the influence of audit fees are influenced by the quality of the internal control level, so from this perspective to explore enterprises which under the background of different internal control quality,we know that earnings management on the influence of audit fees is more realistic significant. In this article we also selected 1348 data of Shanghai and shenzhen from 2011 to 2013 as the sample, By using correlation analysis, descriptive statistics, test and multiple analysis and other methods combining with the listed companies in China. Under the situation of internal control defects four factors, which never exists defects to the major defects of four kinds of situations. Statistics result shows that enterprise internal control level is lowing down year by year, enterprises’ audit cost is also decreasing year by year, which suggests that the lower level of management enterprises pay audit cost also will be more lower to implement earnings management of listed companies; And empirical results prove that under the higher internal control quality level background, earnings management’s positive influence in the audit cost will be reduced.The contribution of this paper are mainly:(1) proved that the earnings management of listed companies have a big effect on audit costs, which shows positive correlation.(2) proved if the quality of listed companies is lower, the earnings management of the influence degree of the audit cost is bigger. This positive effect will gradually weaken. This paper can not prove:(1) without points the direction for studying the concrete of the earnings management and the influence of different direction of audit fee will be different.(2) In the audit fee model, there are some other important influencing factors not considered, these factors need to be further explored.