Empirical Research On The Impact Of Independent Audit Quality On Earnings Management Of Listed Companies

Certified public accountants through professional technology, procedure and means to authenticate and supervise the financial information of listed companies. This is the important mean to solve uneven distribution of information between different stakeholders, reduce cost of contract and business enterprise management authorities goal deviate from the shareholders etc. In recent years, along with the degree of opening of our country market deepening, the sharp contradictions of the capital market is increasing, the important position of the independent audit in information transfer is increasingly highlighted, give full play to the role of independent audit not only involve the local CPA industry’s survival, but also play significant impact on healthy and orderly development of our capital market.In accordance with the provisions of relevant laws and regulations, listed companies need to publicly disclose all kinds of information for the use of the various stakeholders, there is no doubt that the parties must pay most attention to these financial information, then enterprise profitability is more focus of various data. Since the 1980 s, foreign scholars gradually began to pay attention to the effect of independent audit as a third party, and whether it be able to improve the quality of the earnings management, research on this problem also obtained many fruits. In 1989, Schipper expand the scope of earnings management and he should also covers the construction trade surplus management category, this is a big progress in the study of earnings management. Because in our country, economical market formed relatively late, the capital market and the relevant system is not perfect, so in this research our country is comparatively backward. As the domestic market increasingly perfect, Chinese scholars on the research of the relationship between them also gradually deepen and extend. From the reality needs, at present, there is a widespread Chinese listed companies in order to appear on the market, obtain qualification of a rights issue and avoid losses, and even in order to meet the personal desires, they implement earnings management, the management of these actions seriously damage the value of the company, distort the real performance results, misled investors’ judgment about the company’s financial situation, and then make the wrong investment decisions. The consequences for the healthy development of capital market in China also has a great harm. Because of this, studies our country’s independent audit quality on earnings management of listed companies is more necessary, and considering the particularity of market and the existing research imperfect in our country, this article will make further analysis to our country independent audit quality on earnings management of listed companies.This paper first reviews the research achievements at home and abroad; Secondly states the independent audit quality and earnings management theory analysis, this step will provide basis for the article put forward the research hypothesis; Finally sets up regression model, according to the regression results verify the hypothesis in this paper. We selects the a-share listed companies from 2012 to 2014 and get 5607 samples to verify whether high quality independent audit can significantly inhibit the degree of earnings management of listed companies in our country. In the measure of independent audit quality, from the type of audit opinion, accounting firm scale, whether have the industry expertise, customer importance and audit term,these five angles to summarize a comprehensive index. Corresponding measure of earnings management, handling accrued profits through calculation to obtain; Real earnings management measure is calculated by abnormal net operating cash flow, the production cost and discretionary expenditure. By building multiple linear regression model from two aspects of accrued and real earnings management, we research independent audit’s impact on the earnings management of listed companies in our country. The research results show that the independent audit quality to some extent, can inhibit the accrued and real earnings management of listed companies, constitute factors of independent audit quality indicators have different impact on different types of earnings management.Innovation point of this article is mainly in:in the measure of independent audit quality, combining with the measure of standard we selected five corresponding indicators to build a comprehensive index, and then analyzes its influence on different types of earnings management, and detailed analyze each constitute part of independent audit quality’s effects, in turn, to further improve the quality of auditing services, improve the regulatory environment, improve the earnings quality of listed companies in our country to provide some references.