The Research On The Influence Of Institutional Environment And The Media Monitoring On The Auditing Quality

All along, the research on auditing quality is focus and hot issues of academia, the low quality of auditing report would harm interests of participants in capital markets, and even suppress development of Chinese capital market. Therefore, auditing practitioners and theorists mostly focus on improving auditing quality of listed companies. During our economy transition period, there is different institutional environment in different region. When institutional environment is not perfect, the allocation of resources and intervention in market by government is still significant. Auditing as the key institutional arrangements in capital markets, its quality will mainly depend to some extent on institutional environment. Media monitoring of listed companies is strong guarantee for regulatory governance of capital market. As the fourth party media monitoring has right to supervise capital markets, it can reduce agency costs, ease of information asymmetry. The news reports for illegal acts can carry out a warning and make focus of public pressure on capital markets, so media monitoring can improve audit quality by significant role.Firstly based on the rent-seeking theory, institutional theory, asymmetric information theory, principal-agent theory, this paper theoretically analyzed the impact on auditing quality from the institutional environment and media monitoring. Then the paper use 2008-2011 Chinese A-share listed companies as the observed sample by principal component analysis and Heckman sample selection model, and construct multiple linear regression model to examine institutional environment, media monitoring and their mutual relations how to affect auditing quality. The empirical results show that:(1) The institutional environment will impact on auditing quality, the better institutional environment is, the higher auditing quality will be; (2) The media monitoring can help to improve auditing quality, and the more media reports of negative information on the company, the higher auditing quality will be; (3) The lower level of institutional environment is, the more significant effect that media monitoring improves auditing quality will be. Therefore, we need accelerate the process of regional market, promote the balanced development of regional institutional environment, and strengthen the media monitoring on the capital market regulation to promote the development of the capital market.