The Quality Of Internal Control And The Audit Pricing

Compared with general goods there exists both commonness and individuality in audit service as a kind of paid labor provided by the Certified Public Accountant.Overall, the influence factor of audit pricing consists of cost auditing and audit risk. According to the theory of cost-effectiveness the audit pricing increases with the increase of the audit cost. According to the risk-premium theory the audit pricing increases with the increase of the audit risk. In the context of enforcing the Sarbanes-Oxley Act and introducing the relevant policies of the internal control the article mainly discusses what influence the quality of the internal control will have on the audit pricing.It can reduce adverse outcomes caused by the information asymmetry. It is conducive to knowing about the operation performance and financial situation for the investors and CPA and then reducing agency cost. It can send a signal of higher quality of the internal control if the listed companies promptly and carefully disclose the self-assessment reports of internal control which would have an effect on the audit pricing.The article discusses respectively whether the three hypotheses can be proved correct focusing on the listed companies during 2012 and 2013, that is whether there is correlation existing between the internal control weakness and audit pricing, what influence will the extent of internal control weaknesses have on the audit pricing, whether punished by CSRC will have influence on the relationship between the quality of internal control and audit pricing.Build models of audit pricing and test regression. It shows that whether existing internal control weaknesses have an positively effect on the audit pricing and the extent of internal control weaknesses also have an positively effect on the audit pricing. And on this basis the article puts forward several related political proposals and proposes the research limitation.