Research On The Economic Consequence Of Signature CPA’s Job-Hopping For Listed Company Auditing

In recent years, with the further development of market economy and audit firms have gone from strength to strength gradually. The phenomenon which many listed companies change their audit firms becomes increasingly widespread. The changing of audit firm has arisen widely attention of many scholars, the public and the government monitoring department.On the basis of literature review, domestic and foreign scholars take the causes of audit firm’s changing and its’ economic consequence as the angle of view, numerous theoretical analyses and empirical tests were executed and achieved remarkable development. It is worth while to note that most of researches investigate the phenomenon of changing the firm while keeping the same CPA due to the clients following their signed CPA from the perspective of audit firm. However, there are few literatures investigating the phenomenon of the audit firm’s changing from the angle of the signature CPA’s job-hopping. The thesis will analyze the audit firm’s changing based on its’ specific form carefully. It finds that parts of listed companies follow the signature CPA’s job-hopping and employ another audit firm. The phenomenon of changing the firm while keeping the same CPA comes into being. In the research, on the one hand, the research analyzes the effect of the phenomenon of changing the firm while keeping the same CPA on the audit quality from the perspective of the independence theory. On the other hand, from the perspective of assess specificity, the research analyzes the influencing mechanism of the special changing form to the level of audit fees so as to balance and select the phenomenon of signatuture CPA’s job-hopping. Based on the relative data of listed companies on A-Stock market in China, the discretional accruals with the absolute value sign and the natural logarithm of audit fees are regarded as the alternative measure indexes of the audit quality and the level of audit fees respectively. Besides, the happen of changing the firm while keeping the same CPA as the independent variable and adds the relatively controlled variable. The research analyzes the relation between the special form and audit quality and the relation with the level of audit fees respectively. According to the result, When the phenomenon of changing the firm while keeping the same CPA occurs, the level of earning management of listed companies changes a lot and is on the increase. It shows that the phenomenon of changing the firm while keeping the same CPA has negative effect on audit quality, meanwhile, When the phenomenon of changing the firm while keeping the same CPA occurs, the level of earning management of listed companies also changes and is on a declining curse. It demonstrates that the occur of this phenomenon will decrease the level of the audit fees. From the perspective of the social public, the level of the audit fees decreases, but the falling of the audit quality is harmful to the social public, information requirement and users who make the decisions. Taking the conservatism of the result into consideration, the study did the robustness test, but the results were the same. Therefore, although the phenomenon of changing the firm while keeping the same CPA will decrease the level of the audit fees in the current capital market in our country, it is harmful to the audit quality. Taking the social public and information users into consideration, the behavior of changing the firm while keeping the same CPA is needed to discriminated and selected.According to the current situation, the research on the phenomenon of changing the CPA firms based on signature CPA’s job-hopping is rare and it is also a blind spot in current law system. The research on this phenomenon represents special information and the main purpose is to find its special consequences. The research helps investors and audit supervision department to screen the rationality of the change of audit firms. Meanwhile, it provides empirical evidences for the audit supervision department to make and implement the policies in the future.